The present paper studies the impact of the SOX act to the choice of payment in Mergers & Acquisitions for firms with different capital structures. Use Probit and Tobit models to access the firms' pre-acquisition leverage levels as well as the leverage changes of firms because of the SOX act....

In recent years, financial reporting problems among Chinese reverse merger firms (CRMs), listed on U.S. exchanges, have attracted unfavorable attention from regulators, investors, and the business press. Under the SOX Act of 2002, managers' Section 302 assessments of internal control over...