Question
Nonetheless, a study by Dr. Ivy Zhang of the University of Minnesota raises concerns about SOX. Dr. Zhang concluded that SOX contributed significantly to wiping
Nonetheless, a study by Dr. Ivy Zhang of the University of Minnesota raises concerns about SOX. Dr. Zhang concluded that SOX contributed significantly to wiping $1.4 trillion off the value of the stock market. Zhang says some indirect costs of SOX compliance were not included in budgets by managers. While SOX likely imposed significant direct compliance costs on firms, the indirect costs could be even greater. Executives have complained that complying with the details of the rules diverts their attention from normal business practices. Also, as SOX increases the litigation risks for executives, managers are likely to behave more conservatively than shareholders would prefer. These changes could have long-lasting and far-reaching influence on business practices.
Based on what you know about SOX, what are the three strongest pros and cons for the controversial Act?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started