Anmerkungen:
In: Journal of Accounting, Auditing and Finance, Vol. 25, No. 1, pp. 1-26, Winter 2010
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments January 1, 2009 erstellt
Beschreibung:
We examine the effect of the Sarbanes-Oxley Act (SOX) on the extent of aggressive/conservative reporting behavior of public companies. SOX imposes considerably greater potential penalties on CEO/CFOs who engage in financial wrongdoing; therefore, risk averse managers are likely to report lower earnings by reducing discretionary accruals following SOX. Our results indicate that (1) Canadian firms subject to SOX are more conservative in financial reporting in the post-SOX period as evidenced by lower signed discretionary accruals, the Penman and Zhang (2002) conservatism measure, and the differential earnings persistence conservatism measure; (2) the impact of SOX on firms' conservative reporting through discretionary accruals in the post-SOX period is not homogeneous; it is more pronounced for firms that were aggressive in the pre-SOX period