Sarbanes-Oxley Act as a Credential for Reducing Internal Control Failures and Gaps for Creative Accounting

Júlia Rodrigues and Selma Regina Martins Oliveira ()
Additional contact information
Júlia Rodrigues: Fluminense Federal University
Selma Regina Martins Oliveira: Fluminense Federal University

Chapter Chapter 11 in Financial Markets and Corporate Reporting under Geopolitical Risks, 2024, pp 161-177 from Springer

Abstract: Abstract Although the potential benefits of the Sarbanes-Oxley Act (SOX) are reported in the leading literature, little is known about the Sarbanes-Oxley Act (SOX) and the reduction of internal control failures and creative accounting in organizations. This study examines the impacts of the Sarbanes-Oxley Act (SOX) in reducing internal control failures and creative accounting gaps in multinational companies in an emerging economy, in this case Brazil. To enable the development and application of the research, a survey of specialized literature was necessary to improve knowledge about SOX. Primary data were collected from specialists from multinational companies from different sectors in the Southeast region of Brazil. The interview questionnaire examined the level of compliance with SOX and how important the expert/auditor considers each section of SOX to reduce creative accounting. The results suggest that SOX reduces internal control failures and gaps for corporations’ creative accounting practices. This research is original, fills a gap in the literature, and brings substantive contributions: (a) sheds light on company managers and stakeholders; (b) highlights the prominence of SOX as a prominent instrument to reduce failures of internal controls and creative accounting practices in companies; (ii) unexpectedly, in this research, the independent audit showed little relevant compliance and influence; and (c) advances arguments from the literature. In addition to providing greater security to stakeholders regarding their investments, SOX has been gaining prominence as environmental, social, and governance (ESG) issues occupy spaces on corporate strategy agendas.

Keywords: Sarbanes-Oxley Law; Failures of internal controls; Creative accounting; Multinationals in Southeast region of Brazil (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:spr:prbchp:978-3-031-62998-3_11

Ordering information: This item can be ordered from
http://www.springer.com/9783031629983

DOI: 10.1007/978-3-031-62998-3_11

Access Statistics for this chapter

More chapters in Springer Proceedings in Business and Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().