1. SOX's Impact on the Quality of Financial Reporting.
- Author
-
Cox, James D.
- Subjects
Financial Accounting Standards Board -- Evaluation -- Research ,Public Company Accounting Oversight Board -- Evaluation -- Standards -- Research ,Financial disclosure -- Laws, regulations and rules -- Inspection -- Research ,Internal control (Accounting) -- Laws, regulations and rules -- Evaluation ,Accounting -- Standards ,Anniversaries ,Government regulation ,Sarbanes-Oxley Act of 2002 - Abstract
The Sarbanes-Oxley Act of 2002 (SOX) was enacted with widespread bipartisan support rarely seen today, receiving favorable votes of 423 to 3 in the House of Representatives and 99 to [...], The Sarbanes-Oxley Act of 2002 (SOX) was enacted with widespread bipartisan support, rarely seen today, and did so while launching the most sweeping reforms to the American securities laws since their inception in the Great Depression. Now, after more than twenty years have passed since that epic event, the time is ripe to assess whether the financial reporting system of public companies has improved. This article reviews important studies directed to this question and in doing so reveals as well the interconnectedness of the ecology that shapes financial reporting. As captured here, we see that, even though some disclosure initiatives of SOX failed to reach their full potential--such as the auditors' attestations of management assessment of internal control--there evolved initiatives by both the U.S. Securities and Exchange Commission and the Public Company Accounting Oversight Board that fill the gap and move the vision of SOX forward. We therefore leave the field of view with an appreciation that SOX's enduring contribution is pedestalizing the importance of reliable financial reporting systems by public companies.
- Published
- 2023