The Unintended Consequences of the Sarbanes-Oxley Act on Small Business

2008 ◽  
pp. 67-93
Author(s):  
Jiamin Wang
Keyword(s):  
Small Business ◽  
Unintended Consequences ◽  
Sarbanes Oxley

The Unintended Consequences of Sarbanes-Oxley on Technology Innovation and Supply Chain Integration

2007 ◽  
Vol 4 (1) ◽  
pp. 103-121 ◽  
Author(s):  
Vicky Arnold ◽  
Tanya S. Benford ◽  
Joseph Canada ◽  
John R. Kuhn ◽  
Steve G. Sutton
Keyword(s):  
Supply Chain ◽  
Internal Control ◽  
Study Data ◽  
Unintended Consequences ◽  
Production Cycle ◽  
Cross Sectional ◽  
Sarbanes Oxley ◽  
Structural Inertia ◽  
Management Approaches ◽  
The Impact

This paper reports the results of a series of case studies conducted to explore the impact of the Sarbanes-Oxley Act of 2002 on the performance of small and medium-sized enterprises (SMEs). This issue is critical as the SEC and the PCAOB continue to defend the requirement that SMEs adhere to the internal control reporting requirements of Section 404 in the Act, albeit at a revised level of expectation focusing on more of a top-down risk-based approach. Cross-sectional case study data is used to explore the impacts of SOX on SMEs adopting organizational theories as a lens for observing behavior and outcomes. The results of the study confirm that there are both benefits and costs associated with SOX compliance. All of the organizations studied experienced substantial improvements in enterprise risk management approaches. However, the level of difficulty experienced by the various organizations in implementing SOX requirements was highly variable and could be traced back to the underlying factors in structural inertia theory: size, complexity, experience with change, experience with strict controls, and adaptability. Perhaps the most important finding is that SOX does impact organizational flexibility to various degrees as predicted by theory; and this impact can in turn affect production cycle times, information technology investment, supply chain performance, and ultimately, market competitiveness.

The Sarbanes‐Oxley Act of 2002: what impact has it had on small business firms?

2009 ◽  
Vol 24 (8) ◽  
pp. 743-766 ◽  
Author(s):  
Stuart Michelson ◽  
Jud Stryker ◽  
Betty Thorne
Keyword(s):  
Small Business ◽  
Sarbanes Oxley

The Unintended Consequences of Sarbanes-Oxley on Technology Innovation and Supply Chain Integration

2007 ◽  
Author(s):  
Vicky Arnold ◽  
Tanya Benford ◽  
Joseph Canada ◽  
J. Randel Kuhn ◽  
Steve G. Sutton
Keyword(s):  
Supply Chain ◽  
Technology Innovation ◽  
Unintended Consequences ◽  
Supply Chain Integration ◽  
Sarbanes Oxley

The Effects and Unintended Consequences of the Sarbanes-Oxley Act on the Supply and Demand for Directors

2008 ◽  
Vol 22 (8) ◽  
pp. 3287-3328 ◽  
Author(s):  
James S. Linck ◽  
Jeffry M. Netter ◽  
Tina Yang
Keyword(s):  
Supply And Demand ◽  
Unintended Consequences ◽  
Sarbanes Oxley

PCAOB Inspections of Smaller CPA Firms: The Perspective of Inspected Firms

2010 ◽  
Vol 24 (2) ◽  
pp. 189-219 ◽  
Author(s):  
Brian Daugherty ◽  
Wayne Tervo
Keyword(s):  
Negative Impact ◽  
Academic Research ◽  
Unintended Consequences ◽  
Publicly Traded ◽  
Investor Confidence ◽  
The Public ◽  
Market Participants ◽  
Sarbanes Oxley ◽  
Public Company ◽  
Inspection Process

SYNOPSIS: We solicit perceptions of the Public Company Accounting Oversight Board’s (PCAOB) inspection process from the leadership of triennial firms (100 or fewer publicly traded audit clients, inspected triennially) receiving their initial inspection. Our research is motivated by a growing stream of academic research related to triennial firms. Practitioners have called for research to determine whether the performance of audits in the Sarbanes-Oxley era may fail to attain the stated objective of enhancing investor confidence in the capital markets. Academics note further PCAOB inspection research can provide important insights into the consequences of PCAOB inspection for auditors and other market participants. In general, smaller respondents reported initial PCAOB inspections resulted in a negative impact on many aspects of their audit practices, while medium and larger firms reported more favorable consequences. Collectively, responding firms evaluated their initial inspection team’s performance favorably, but were more critical of other aspects of the inspection process. Levels of satisfaction with nearly all aspects of PCAOB inspections appear to increase with firm size and the passage of time. We interpret our findings as suggesting the efficacy of PCAOB inspections may be enhanced by focusing on potential unintended consequences and inspection process modifications rather than on inspectors’ qualifications and actions.

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