the Sarbanes-Oxley Act. What consequences have American companies identified after implementation of Section 404 of the Sarbanes-Oxley Act?

摘要

Background and Problem: A consequence of the many accounting scandals was that congresspassed the Sarbanes-Oxley Act in July 2002. This in order to restore public confidence in thestock market and increase confidence in the integrity of the entire system of public ownershipand accountability in the U.S. The legislation establishes new and enhanced standards for allU.S. public company boards and management, and for the accounting profession. One of theSections in the Act (Section 404) is Management assessment of internal controls. I found it ofgreat interest to investigate what consequences American companies have identified afterimplementation of Section 404 of the Sarbanes-Oxley Act.Purpose: With this research, my purpose is to explain and analyze the consequences Section 404of the Sarbanes-Oxley Act has had on American companies. By looking at earlier research on thesubject and questioning people who have a great deal of experience and knowledge in therelevant area, this is to be accomplished.Delimitations: My focus is mainly on section 404 of the Sarbanes-Oxley Act- ManagementAssessment of Internal Controls. In addition, the legislation only affects companies that you canfind on American exchanges and their subsidiaries, so this thesis will focus on a few of thesecompanies in the U.S.Methodology: This thesis is based on scientific books and articles as well as survey’s that wassend to people who have a lot of knowledge and experience on the subject. This thesis follows ahermeneutic approach and is both descriptive and explanatory. In addition, the qualitativemethod is most appropriate for this thesis.Analysis and Conclusion: Section 404 of the Sarbanes-Oxley Act has caused both positive andnegative consequences. The costs of implementing Section 404 became so much higher thanwere initially predicted and various other problems have also been identified. But mostimportant, nearly all people think that SOX has succeeded to reach its goal; to restore investorconfidence and transparency in financial reporting.Suggestions for further research: My focus in this thesis has been from an Americancompany’s perspective. Thus, it would be very interesting to investigate how auditors, on theother hand, have been affected by the implementation of Section 404 of the Sarbanes-Oxley Act.