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SOX after Ten Years: A Multidisciplinary Review

Coates, John C., Srinivasan, Suraj·2014·Accounting Horizons
DOI 10.2308/acch-50759
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Abstract

SYNOPSIS: We review and assess research findings from more than 120 papers in accounting, finance, and law to evaluate the impact of the Sarbanes-Oxley Act. We describe significant developments in how the Act was implemented and find that despite severe criticism, the Act and institutions it created have survived almost intact since enactment. We report survey findings from informed parties that suggest that the Act has produced financial reporting benefits. While the direct costs of the Act were substantial and fell disproportionately on smaller companies, costs have fallen over time and in response to changes in its implementation. Research about indirect costs such as loss of risk taking in the U.S. is inconclusive. The evidence for and social welfare implications of claimed effects such as fewer IPOs or loss of foreign listings are unclear. Financial reporting quality appears to have gone up after SOX but research on causal attribution is weak. On balance, research on the Act's net social welfare remains inconclusive. We end by outlining challenges facing research in this area, and propose an agenda for better modeling costs and benefits of financial regulation.

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Metadata

Authors
Coates, J. C., & Srinivasan, S.
Affiliations
Harvard University (US)
Corresponding author
Srinivasan, Suraj
ORCID
Srinivasan, Suraj
Venue
Accounting Horizons
Publisher
American Accounting Association
Published
2014-09-01
Volume
28
Issue
3
Pages
627-671
ISSN
  • 0888-7993 (ISSN-L)
  • 1558-7975
DOI
10.2308/acch-50759
OpenAlex
W3122319502
Cited by
228
References
1
Citations by year
2026: 10 · 2025: 11 · 2024: 21 · 2023: 12 · 2022: 24 · 2021: 22 · 2020: 22 · 2019: 19 · 2018: 30 · 2017: 20 · 2016: 13 · 2015: 11 · 2014: 3
FWCI
66.18
Type
journal article
Language
en
Open access
closed
Locations
Accounting Horizons (publishedVersion)
Topics
  • Social Sciences › Business, Management and Accounting › Accounting › Auditing, Earnings Management, Governance
  • Social Sciences › Economics, Econometrics and Finance › Finance › Corporate Finance and Governance
  • Social Sciences › Business, Management and Accounting › Management Information Systems › Financial Reporting and XBRL
Keywords
Sarbanes-Oxley Act, financial regulation, financial reporting quality, compliance costs, small business, risk-taking, initial public offerings, overseas listing, social welfare (welfare economics), cost-benefit analysis, corporate governance, audit regulation

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