{"id":771,"date":"2007-06-20T14:49:08","date_gmt":"2007-06-20T19:49:08","guid":{"rendered":"http:\/\/www.sequence-inc.com\/fraudfiles\/2007\/06\/20\/audit-fees-and-sarbanes-oxley\/"},"modified":"2007-06-20T14:49:53","modified_gmt":"2007-06-20T19:49:53","slug":"audit-fees-and-sarbanes-oxley","status":"publish","type":"post","link":"https:\/\/www.sequenceinc.com\/fraudfiles\/audit-fees-and-sarbanes-oxley\/","title":{"rendered":"Audit fees and Sarbanes-Oxley"},"content":{"rendered":"<p>Last month, a paper was released regarding a study of Sarbanes-Oxley and audit fees. &#8220;<a href=\"http:\/\/papers.ssrn.com\/sol3\/papers.cfm?abstract_id=983772\">The Effect of the Sarbanes-Oxley Act (Section 404) Management&#8217;s Report on Audit Fees, Accruals and Stock Returns<\/a>&#8221; found that audit fees have effectively doubled for public companies and lowered stock valuations. Is there any doubt that SOX has cost a lot of people a lot of money?<\/p>\n<p>The abstract of the paper (emphasis added):<\/p>\n<p>In 2003, the Securities and Exchange Commission enacted the Sarbanes-Oxley Act (SOX) Rule 404. It required firms with public float of more than $75 million to file a management&#8217;s report. I use a regression discontinuity design to quantify the comparative impact of this provision across firms just above and just below the threshold. The management&#8217;s report [1] <strong>effectively doubled the average annual audit fees from $370,700 to $882,300<\/strong>, [2] reduced discretionary accruals by $8.8 million, and [3]<strong> lowered the stock valuation of firms required to file such reports<\/strong>. The results are robust to instrumenting the management&#8217;s report in order to control for firms&#8217; ability to manipulate their public float. <a href=\"http:\/\/technorati.com\/tag\/tracy\" rel=\"tag\"><\/a> <a href=\"http:\/\/technorati.com\/tag\/coenen\" rel=\"tag\"><\/a> <a href=\"http:\/\/technorati.com\/tag\/tracy+coenen\" rel=\"tag\"><\/a><a href=\"http:\/\/technorati.com\/tag\/tracy+l+coenen\" rel=\"tag\"><\/a> <a href=\"http:\/\/technorati.com\/tag\/sarbanes\" rel=\"tag\"><\/a> <a href=\"http:\/\/technorati.com\/tag\/sarbanes+oxley\" rel=\"tag\"><\/a> <a href=\"http:\/\/technorati.com\/tag\/sox\" rel=\"tag\"><\/a><a href=\"http:\/\/technorati.com\/tag\/fraud\" rel=\"tag\"><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Last month, a paper was released regarding a study of Sarbanes-Oxley and audit fees. &#8220;The Effect of the Sarbanes-Oxley Act (Section 404) Management&#8217;s Report on Audit Fees, Accruals and Stock Returns&#8221; found that audit fees have effectively doubled for public [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[5],"tags":[],"class_list":["post-771","post","type-post","status-publish","format-standard","hentry","category-fraud-news-stories"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p6Z0e-cr","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.sequenceinc.com\/fraudfiles\/wp-json\/wp\/v2\/posts\/771","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sequenceinc.com\/fraudfiles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sequenceinc.com\/fraudfiles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sequenceinc.com\/fraudfiles\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sequenceinc.com\/fraudfiles\/wp-json\/wp\/v2\/comments?post=771"}],"version-history":[{"count":0,"href":"https:\/\/www.sequenceinc.com\/fraudfiles\/wp-json\/wp\/v2\/posts\/771\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.sequenceinc.com\/fraudfiles\/wp-json\/wp\/v2\/media?parent=771"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sequenceinc.com\/fraudfiles\/wp-json\/wp\/v2\/categories?post=771"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sequenceinc.com\/fraudfiles\/wp-json\/wp\/v2\/tags?post=771"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}