Corporate Governance in the post SOX era
Detailedly summarize the article “Corporate governance in the post-Sarbanes-Oxley era: Auditor’s experiences.
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Corporate Governance in the Post-Sarbanes-Oxley Era: Auditors’ Experiences
This article discusses how accounting events preceding Sarbanes-Oxley Act (SOX), such as World Com and Enron’s mishandling of accounting statements, led to SOX. Cohen, Krishnamoorthy, and Wright (CKW), the authors of this article, primarily wanted to identify how external auditor experiences changed due to SOX implementation. The authors main concern was the change in external auditor’s interactions with the audit committee, the board of directors, and internal auditors and how it affects the auditor’s risk assessment, accounting issue resolutions, and the hiring/firing of auditors.
Prior Research and CKW Current Study’s Goal
Prior academic research has indicated that presence of strong corporate governance has led to lower rates of fraud, fewer restatements, and a lower level of earnings management. CKW move past this prior research by taking into account auditor experiences with SOX, audit committee expertise, and audit committee support.…
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