The risk implication of Sarbanes-Oxley Act of 2002: An empirical examination of the US financial services industry

Haq, M.; Pathan, Md Shams Tabrize; Hoque, M.

doi:10.1080/09603107.2014.920477

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Authors

Haq, M.

Pathan, Md Shams Tabrize

Hoque, M.

Date

2014

Type

Journal Article

Metadata

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Citation

Haq, M. and Pathan, S. and Hoque, M. 2014. The risk implication of Sarbanes-Oxley Act of 2002: An empirical examination of the US financial services industry. Applied Financial Economics. 24 (15): pp. 1005-1015.

Source Title

Applied Financial Economics

DOI

10.1080/09603107.2014.920477

ISSN

0960-3107

Faculty

Faculty of Business and Law

School

School of Economics, Finance and Property

URI

http://hdl.handle.net/20.500.11937/76645

Collection

Curtin Research Publications

Abstract

This article examines the risk effect of the Sarbanes-Oxley Act of 2002 (SOX) for the US financial services (FS) industry. The major provisions of SOX relate to increased transparency of the financial reporting system and improved internal governance of firms. The overall results support that SOX reduced the total risk and idiosyncratic risk of FS firms, particularly of banks, savings and insurance companies. Yet, this article finds an increase in systematic risk of banks, savings and insurance companies. This outcome may be due to increased financial integration, innovation, globalization and deregulation. © 2014 © 2014 Taylor & Francis.