Did the Sarbanes-Oxley Act Affect Corporate Risk-Taking? The Study of Cross-Listed Companies

Has Section 404 of the Sarbanes-Oxley Act Discouraged Corporate Risk-Taking? New Evidence from a Natural Experiment

SSRN Electronic Journal ◽

10.2139/ssrn.1997228 ◽

2013 ◽

Cited By ~ 5

Author(s):

Ana M. Albuquerque ◽

Julie Lei Zhu

Keyword(s):

Risk Taking ◽

Natural Experiment ◽

Section 404 ◽

Sarbanes Oxley ◽

Corporate Risk ◽

New Evidence

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The chilling effect of Sarbanes–Oxley: A discussion of Sarbanes–Oxley and corporate risk-taking

Journal of Accounting and Economics ◽

10.1016/j.jacceco.2009.06.003 ◽

2010 ◽

Vol 49 (1-2) ◽

pp. 53-57 ◽

Cited By ~ 32

Author(s):

Aiyesha Dey

Keyword(s):

Risk Taking ◽

Chilling Effect ◽

Sarbanes Oxley ◽

Corporate Risk

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Are Corporate Risk-Taking Practices Indicative of Aggressive Reporting Practices?

Journal of the American Taxation Association ◽

10.2308/atax-51809 ◽

2017 ◽

Vol 40 (1) ◽

pp. 31-55 ◽

Cited By ~ 3

Author(s):

Mary Margaret Frank ◽

Luann J. Lynch ◽

Sonja Olhoft Rego ◽

Rong Zhao

Keyword(s):

Financial Reporting ◽

Risk Taking ◽

Positive Association ◽

Managerial Opportunism ◽

Reporting Practices ◽

Sarbanes Oxley ◽

Organic Growth ◽

Asset Growth ◽

Corporate Risk

ABSTRACT We examine empirically whether the manner of risk-taking in which firms engage is associated with aggressive reporting practices. Theoretical and anecdotal evidence suggests that firms face a trade-off between risk-taking and managerial opportunism as they seek to produce higher returns. In the period before the Sarbanes-Oxley Act of 2002 (SOX), we find that firms with more risk-taking through external asset growth are more likely to engage in aggressive reporting, but the reverse is true for firms with a practice of risk-taking through organic growth. Consistent with evidence in prior research on the improved quality of financial reporting after SOX, the positive association between a practice of risk-taking through asset growth and aggressive reporting is attenuated in the post-SOX period.

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