To exempt or not to exempt non-accelerated filers from compliance with the auditor attestation requirement of Section 404(b) of the Sarbanes–Oxley Act

Kareen E. Brown , Fayez A. Elayan , Jingyu Li , Emad Mohammad , Parunchana Pacharn , Zhefeng Frank Liu
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引用次数: 5

Abstract

We examine the stock market reaction to the SEC announcement to permanently exempt non-accelerated filers from compliance with Section 404(b) of the Sarbanes–Oxley Act. Mandatory compliance with auditor attestation under Section 404(b) is highly controversial. Using a sample of non-accelerated issuers for 2006–2011, we find a negative market reaction to the November 4, 2009 exemption announcement. However, most of the negative returns accrue to non-accelerated filers that do not voluntarily comply with Section 404(b), suggesting that auditor attestation enhances firm value. The use of a Big 4 auditor, strong analyst following, and superior internal controls over financial reporting (ICFR) are associated with positive/less negative market responses. Voluntary compliers with Section 404(b) are more likely to have a Big 4 auditor, stronger analyst coverage, effective ICFR, stronger firm performance and lower information asymmetry. Our results are consistent with firms using voluntary compliance with SOX 404(b) as a signal of superior operating performance and ICFR quality to overcome information asymmetry and therefore mitigate the negative valuation impact of the permanent exemption from auditor attestation.

豁免或不豁免非加速申报者遵守《萨班斯-奥克斯利法案》第404(b)条的审计师认证要求
我们研究了股票市场对美国证券交易委员会宣布永久豁免非加速申报者遵守萨班斯-奥克斯利法案第404(b)条的反应。根据第404(b)条强制遵守审计师认证是非常有争议的。使用2006-2011年非加速发行人的样本,我们发现市场对2009年11月4日豁免公告的负面反应。然而,大部分的负收益来自那些不自愿遵守第404(b)条的非加速申报者,这表明审计师认证提高了公司价值。使用四大会计师事务所,强大的分析师追随者,以及对财务报告(ICFR)的卓越内部控制与积极/较少的负面市场反应有关。自愿遵守第404(b)条的人更有可能拥有四大审计师、更强的分析师覆盖面、有效的ICFR、更强的公司绩效和更低的信息不对称。我们的结果与公司使用自愿遵守SOX 404(b)作为卓越经营业绩和ICFR质量的信号来克服信息不对称,从而减轻永久豁免审计认证的负面估值影响的结果是一致的。
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