CORPORATE ACCOUNTING MALFEASANCE AND FINANCIAL REPORTING RESTATEMENTS IN THE POST-SARBANES-OXLEY ERA

Peter Harris, Katherine Kinkela, Liz Washington Arnold and Michelle Liu

Review of Business and Finance Studies, 2017, vol. 8, issue 1, 41-48

Abstract: The U.S. Congress passage of the Sarbanes-Oxley Act of 2002 (SOX) was a direct response to the accounting scandals of the 1990s and an attempt to reform the financial or business reporting process. Due to corporate malfeasance in the United States since the mid 1990s, there has been a significant increase in the number of companies restating their financial statements. After a large increase in restatements over the first years after SOX, for the past five years, fewer companies are restating financial statements. This paper provides an overview of corporate accounting malfeasance, the state of corporate accounting malfeasance, reasons for its occurrence, comprehensive listings of the types of corporate accounting malfeasance activities, and the U.S. legislative response. The paper also theorizes that not only is corporate accounting malfeasance is here to stay, but malfeasance is an inherent part of the U.S. and global financial system, regardless of the policies implemented by the Securities and Exchange Commission (SEC), other regulatory bodies, or leading institutions of the accounting profession. The paper suggests that certain aspects of the Sarbanes-Oxley Act have been effective in helping companies to detect fraud more easily, and corporations have added internal controls and provided restatements of financial statements to demonstrate their commitment to compliance. Future commitment to internal controls for corporations and auditors is necessary to ensure transparency in financial statements

Keywords: Accountant; Accounting; Auditing; Fraud; Malfeasance; Sarbanes-Oxley; Financial Reporting (search for similar items in EconPapers)
JEL-codes: M41 (search for similar items in EconPapers)
Date: 2017
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.theibfr2.com/RePEc/ibf/rbfstu/rbfs-v8n1-2017/RBFS-V8N1-2017-4.pdf (application/pdf)

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:ibf:rbfstu:v:8:y:2017:i:1:p:41-48

Access Statistics for this article

Review of Business and Finance Studies is currently edited by Terrance Jalbert

More articles in Review of Business and Finance Studies from The Institute for Business and Finance Research
Bibliographic data for series maintained by Mercedes Jalbert ( this e-mail address is bad, please contact ).