Motivated by regulatory assertions that the purpose of SOX was to restore investor confidence in the securities markets, we examine changes in the stock market reaction to earnings restatements following the implementation of SOX in order to evaluate whether the Act's reforms have had a...

A primary goal of the regulatory reforms enacted around the implementation of the Sarbanes-Oxley Act (SOX) was to improve the credibility of financial reporting. While earnings restatements resulting from accounting issues damaged investor trust prior to the implementation of SOX, we hypothesize...