Once the enactment of the Sarbanes-Oxley Act of 2002 (SOX) became imminent, many companies protested that complying with SOX provisions was too onerous and costly and would result in many companies choosing to withdraw from public trading. We investigate whether these doomsday predictions were well-founded based on a review of SEC Form 15 requests to delist and related news releases during the period 2002 to 2004. Our findings suggest that there has not been a significant increase in the number of requests to delist since the enactment of SOX. Furthermore, we find that of companies that delist, relatively few (4.7 percent) attribute their delisting to SOX. Companies that did attribute their delisting to SOX were smaller and less likely to be audited by Big 4 auditors, characteristics that have been previously found to be associated with poorer financial reporting quality.
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Research Article|
January 01 2007
SOX Doomsday Predictions in Hindsight: Evidence from Delistings Free
Lizabeth A. Austen;
Lizabeth A. Austen
Lizabeth Austen and Denise Dickins are both Assistant Professors at East Carolina University.
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Denise Dickins
Denise Dickins
Lizabeth Austen and Denise Dickins are both Assistant Professors at East Carolina University.
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American Accounting Association
2007
Current Issues in Auditing (2007) 1 (1): A21–A27.
Citation
Lizabeth A. Austen, Denise Dickins; SOX Doomsday Predictions in Hindsight: Evidence from Delistings. Current Issues in Auditing 1 December 2007; 1 (1): A21–A27. https://doi.org/10.2308/ciia.2007.1.1.A21
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