Sarbanes

Sarbanes–Oxley and corporate risk-taking1 the content of the article.This article illustrate SOX have the big affect to public corporate of America，the act which have a request is to force firm through new requirements,backed by stiff penalties,,meanwhile,due to this law,it ,need public corporate must submit a report which is need have a signature of chief executives and chief,this report also explain the main wrong in the finance management other important manangement.in addition ,it is have a much important to auditors,under404 of the act ,executives must prove that the have established and an adequate internal structure for financial reporting.this request may prove the accurancy of financial accountants and personal liability ,after SOX “the coporate need spend sum of ther capital and R&D expenditures it decline significantly for US firms compared with non-US FIRMS AFTER SOX”(Leonce L. Bargeron, Kenneth M. Lehn , Chad J. Zutter 2010)The section 2 introuduce the SOX and corporate rise-taking which is say the request to the members of SOX ,,it also need enhance outside audits independents and effectives,Indeed ,as moizer(1991)points out ,“there is more general argument which states that the corporate auditor will always act independently in a state of enlightened self –interest involvinf a necessary balancing of public and self-interests.”After that ,SOX also have a request that the companies adopt rule to evaluate and disclose the adequacy of their internal financial controls in annual reports（404）Eachlisted company must issue a self report disclosed weaknesses, external audit independence and a report，the section 3 is some samples and data. For example 2 ,due to the low-risk assest has a reduction in corporate risk-taking after SOX ,table3 Hence, (Table 3) “provide corroborating support for th premise that SOX has discouraged corporate risk-taking by US firms relative to non-US firms in similar industries and of similar size.” Table 4 indicate that there also a decline in risk-taking by US firms in the post-SOX period as compared with before in 1998-2001.fromtable5We can find that Table 6 shows in CAPEX, R&D, INVEST, and CASH equations, the directions and relative magnitudes are consistent with the prediction that larger firms, because of their complexity, are more likely to reduce risk-taking so as to reduce the expected costs of complying with Section 404.the summery is we do not believe that the decline in us stock prices “he changes in risk-taking induced by SOX are inefficient. Furthermore, insofar that a major source of agency problems is that managers are more risk averse than stockholders want them to be, then SOX may be aggravating this problem, leading to further value destruction. These issues await further investigation.”（(Leonce L. Bargeron, Kenneth M. Lehn , Chad J. Zutter 2010)2 importance of the issues addresseddue to 404 act havie a strict request to internal control ,it can reduce the business risk , “internal can contribute to such assurance,although there are inherent limitations in any system of internal control”(Eleventh 2009)and improve investment may know the corporate running,and insure corporate finance stastement have a liability,public corporate finance running,internal control procedure,deside procedure will more accurancy.meanwhile,the paper indicates that, relative to a control sample of comparable firms that are not subjectto SOX, cross-listed firms became significantly more transparent following SOX. Second, due to SOX ensures reliable financial reporting,so Investors are increase, after that ,it will make the finance market more equitable. So that more corporate can have more chance to advance,SOX has resolt in a decline in risk taking ,as you can see in table 2the data have a reduction from-0.016 to -0.0171,the same with table 3,it divedied five parts which is CAPEX,R&D INVEST , and STD.all are decrease,bue there has a increase in the US of cash. SOX has been praised by a cross-section of financial industry experts, citing improved investor confidence and more accurate, reliable financial statements. The CEO and CFO are now required to unequivocally take ownership for their financial statements under Section 302, which was not the case prior to SOX. Further, auditor conflicts of interest have been addressed, by prohibiting auditors from also having lucrative consulting agreements with the firms they audit under Section 201. SEC Chairman Christopher Cox stated in 2007: "Sarbanes–Oxley helped restore trust in U.S. marketsby increasing accountability, speeding up reporting, and making audits more independent."The FEI 2007 study and research by the Institute of Internal Auditors (IIA) also indicate SOX has improved investor confidence in financial reporting, a primary objective of the legislation. The IIA study also indicated improvements in board, audit committee, and senior management engagement in financial reporting and improvements in financial controls.Financial restatements increased significantly in the wake of the SOX legislation, as companies "cleaned up" their books. Glass, Lewis & Co. LLC is a SanFrancisco-based firm that tracks the volume of do-overs by public companies. Its March 2006 report, "Getting It Wrong the First Time," shows 1,295 restatements of financial earnings in 2005 for companies listed on U.S. securities markets, almost twice the number for 2004. "That's about one restatement for every 12 public companies—up from one for every 23 in 2004," says the report.3 the appropriateness of the research methodsThis research methods adoped the fact example ,as you can see,there are 7 tables and two pictures,in addition ,it have a accurancy to introduce the distinclish ahe SOX from different aspects in the US corporate snd un US corporate,after ,there alsointroduce the reason and affect of SOX. This act need spend much expensive cost ,it is a big challenge,4 inconsistencies and disagreementsA research study published by Joseph Piotroski of Stanford University and Suraj Srinivasan of Harvard Business School titled "Regulation and Bonding: Sarbanes Oxley Act and the Flow of International Listings"( in the Journal of Accounting Research in 2008),it found that following the act's passage, smaller international companies were more likely to list in stock exchanges in the U.K. rather than U.S. stock exchanges,in addition,the act will have a strick exam to public company .it add sum of people to internal control ,finance and account to management,so it will spend a lot of costs and affect Going on the market progress,not only non-us company ,but also some us small size or big size corporate,someone think it prevent the stork advance. “Prominent scholars and policymakers have criticized the Sarbanes-Oxley Act of 2002 (SOX)1 for allegedly discouraging risk-taking by publicly traded US companies.”(Leonce L. Bargeron, Kenneth M. Lehn , Chad J. Zutter 2010)My ImpressionsAs the United States securities management compliance, can also check their IT internal control framework to protect system.Based on the Sarbanes-Oxley Act complianceThe recent implementation of the most severe can encounter from the certificate of compliance.Project, IBM recommends that users inManagement measures, the Sarbanes-Oxley Act on to other departments IBM, IT management and IT further management itemsIn the United States listed corporate enterprise internal control requirements.Controlling project should be able to help the management goal, the popularity of risk and prevent The long-term challenge, never seems so, in enterprises and to establish the organizational strategy to improve understanding, law,It's different from enterprise level also set up a set of standard read, correct positioning of IT in enterprise management.Industry of daily business increasingly in system imperative control framework, identification, control of the enterprisesThe system also presents a critical review decision of enterprises now Sarbanes-Oxley "test process exists.Therefore, if the enterprise already, also should be the combination of business process.From the line image of Fig 1 ,we can see ,there has a lowest point of PTSE100 and S&P500,both of them reach to -24% in 2002,but S&P reach the lowest than them which is -30%in 2001, then all of them have a nearly steady increase in the following years.Let us have a look of Fig2, both of PTSE100 and S&P500 have reached to 1.7% and 1.5 respectly,whereas TSX comp is1.55%.after that, PTSE100 and S&P500 have a dramaticallyDecrease, the PTSE100 reach the lowest point which is 0.55% in 2005. so I have a conclusion that is SOXPlayed a role in promoting in the finance market,however it is not enough, Still need improvement.ReferenceEleventh. (2009 )Audit risk and materiality Great Britain under the Philip Allan imprint LtD pressTOM ,L s.p.Lumby R.w,perks.( 1993) an independent corporateaudit ,London ,internationalTho,mson Business press.,Alan, M &John ,T (2008) Sarbanes act 2006 ,UK,Pat Bond, PressHayes,D Hayes Dassen.S(2005) PEARSON educationPiotroski, Joseph D. and Srinivasan, Suraj, Regulation and Bonding: TheSarbanes–Oxley Act and the Flow of International Listings(January 2008). Available at SSRN: /abstract=956987Farrell, Greg (2007-07-30). "USA Today – SOX Law Has Been a Pretty Clean Sweep". ./money/companies/regulation/2007-07-29-sarbanes-oxley_ N.htm. Retrieved 2010-08-27.1.^ "FEI Survey". .2008/index.php?s=43&item=204. Retrieved 201040069422Zhuoqiong zhu。