Given the board of directors’ oversight role with respect to internal control systems, we examine how disclosures of internal control material weaknesses under Sarbanes-Oxley Section 404 affect shareholders’ voting in director elections. We find that the presence of material weaknesses is...

I study how increased internal control disclosure requirements mandated by the Sarbanes-Oxley Act (SOX) affect annual corporate governance decisions regarding CFOs. Using non-CEO, non-COO executive officers as a control group, I find that CFOs of firms with weak internal controls receive lower...

We find that firms are less likely to report an internal control material weakness (as mandated by the Sarbanes-Oxley Act) in a given year if one of their audit committee members is concurrently on the board of a firm that disclosed a material weakness within the prior three years. We find a...

We examine the relation between disclosure tone and shareholder litigation to determine whether managers’ use of optimistic language increases litigation risk. Using both general-purpose and context-specific text dictionaries to quantify tone, we find that plaintiffs target more optimistic...

This international empirical study analyses the relation between board transparency, CEO monitoring policy and financial performance. A unique dataset of, on average, 1211 companies from 25 different countries, as provided by international SiRi analysts over the years 2003-2007, enables us to...

When there is high information asymmetry between directors and managers, independent directors do not have enough information to perform their functions. Only when faced with a good internal information environment can such directors acquire enough information to provide advice and monitor...

This article investigates how the stock market reacts to the disclosure of internal control deficiencies under the Japanese Sarbanes-Oxley Act of 2006. Given the Japanese official agencies' attempts to minimize negative shocks, we find no stock market reactions on the whole to the disclosure of...

We document negative stock returns and elevated trading volumes around executives' early option exercise disclosures post-SOX but not pre-SOX. This stock price reaction is incomplete, and the negative stock price drift is smaller post-SOX compared to pre-SOX. We also show effects of media...

Sections 302 and 404 of the landmark Sarbanes-Oxley Act require firms to periodically assess and report control deficiencies to the audit committee as well as to the SEC. Section 302 specifically directs company management to identify and report control deficiencies while Section 404 provides...

We examine whether home country investor protection and ownership structure affect cross-listed firms' compliance with SOX-mandated internal control deficiency (ICD) disclosures. We develop a proxy for the likelihood of cross-listed firms' ICD misreporting during the Section 302 reporting...