Costs of Sarbanes-Oxley Compliance Term Paper by Nicky

Costs of Sarbanes-Oxley Compliance
A review of the research on the costs of Sarbanes-Oxley compliance in small businesses and in large corporate management.
# 146410 | 1,325 words | 10 sources | APA | 2010 | US
Published on Dec 26, 2010 in Business (Accounting) , Business (Small) , Law (Business) , Accounting (General)


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Description:

The paper examines the literature that illustrates that regardless of whether the company is large or small, the costs of compliance with the Sarbanes-Oxley act are large and place a great burden on the company. The paper focuses on the methods several companies used to absorb the significant costs of compliance.

Outline:
Literature Review
Impact on Small Businesses
Impact on Large Corporate Management
Conclusion

From the Paper:

"Larger corporations are expected to have a larger capacity to absorb shocks than smaller companies. However, for the smaller company, the impact of Sarbanes-Oxley can have a significant impact. According to the US General Accounting Office, smaller public entities experienced a disproportionately higher impact of the costs associated with compliance with the requirements of the Sarbanes-Oxley Act (GAO, 2006). These costs are larger for smaller companies due to the percentage difference in audit fees and the aggregate impact on the operating budget. Larger firms pay smaller accounting fees, based on percentages, than smaller companies. In addition, many smaller firms had to adjust to a system that entailed formal, rather than informal control mechanisms (GAO, 2006)."

Sample of Sources Used:

  • Carpenter, T., Fennema, M., Fretwell, P., & Hillison, W. (2004). A Changing Corporate Culture. How Companies are adjusting to Sarbanes-Oxley. Journal of Accountancy. March 2004. Retrieved February 8, 2009 from http://www.journalofaccountancy.com/Issues/2004/Mar/AChangingCorporateCulture.ht m
  • Crosley, G. (2005). Selling to Audit Committees. Journal of Accountancy. February 2005. Retrieved February 8, 2009 from http://www.journalofaccountancy.com/Issues/2005/Feb/SellingToAuditCommittees.htm
  • Daks, M. (2006). Companies 'Go Dark' to Avoid SOX Compliance, New Jersey Law Journal, Aug. 3, 2006. Retrieved February 8, 2009 from http://www.law.com/jsp/ihc/PubArticleIHC.jsp?id=1154509535896).
  • Edison, A/ (2006). Exploring the Impact of Sarbanes-Oxley. Oil & Gas Financial Journal. 3 (10). Retrieved February 8, 2009 from http://www.ogfj.com/display_article/275018/82/ARCHI/none/none/1/Exploring-the- impact-of-Sarbanes-Oxley/
  • Government Accounting Office (GAO) (2006). Sarbanes-Oxley Act: Consideration of Key Principles Needed in Addressing Implementation for Smaller Public Companies. GAO- 06-0361. Retrieved February 8, 2009 from http://www.gao.gov/new.items/d06361.pdf.

Cite this Term Paper:

APA Format

Costs of Sarbanes-Oxley Compliance (2010, December 26) Retrieved October 16, 2021, from https://www.academon.com/term-paper/costs-of-sarbanes-oxley-compliance-146410/

MLA Format

"Costs of Sarbanes-Oxley Compliance" 26 December 2010. Web. 16 October. 2021. <https://www.academon.com/term-paper/costs-of-sarbanes-oxley-compliance-146410/>

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