Compliance costs and disclosure requirement mandates: Some evidence
Kathy Fogel,
Rwan El-Khatib,
Nancy Chun Feng and
Ciara Torres-Spelliscy
Research in Accounting Regulation, 2015, vol. 27, issue 1, 83-87
Abstract:
This note contributes to the discussion on the compliance costs of disclosure requirements for publicly traded companies. Prior research tends to focus on audit cost increases when disclosure requirements are stricter. We add some evidence from the point of views of shareholders. Particularly, we contrast stock market reaction to the 2002 Sarbanes–Oxley (SOX) Act which significantly enhanced public company disclosure requirements, with the 2012 Jumpstart Our Business Startups (JOBS) Act which alleviated disclosure requirements for small firms. Contrary to popular belief that more disclosure rules impose regulatory burdens on firms and are costly to implement, we find that the stock market reacted positively toward rules that require more disclosure; whereas it reacted negatively toward rules that require less disclosure, even though those disclosure rules were initially designed to reduce the costs of compliance.
Keywords: Sarbanes–Oxley Act; Jumpstart Our Business Startups Act; Disclosure rules; Costs of compliance; Market reactions (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations: View citations in EconPapers (7)
Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1052045715000119
Full text for ScienceDirect subscribers only
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:eee:reacre:v:27:y:2015:i:1:p:83-87
DOI: 10.1016/j.racreg.2015.03.010
Access Statistics for this article
Research in Accounting Regulation is currently edited by G. Previts
More articles in Research in Accounting Regulation from Elsevier
Bibliographic data for series maintained by Catherine Liu (repec@elsevier.com).