The risk implication of Sarbanes-Oxley Act of 2002: an empirical examination of the US financial services industry

Mamiza Haq, Shams Pathan, Mohammad Hoque

Research output: Contribution to journalArticlepeer-review

Abstract

This article examines the risk effect of the Sarbanes-Oxley Act of 2002 (SOX) for the US financial services (FS) industry. The major provisions of SOX relate to increased transparency of the financial reporting system and improved internal governance of firms. The overall results support that SOX reduced the total risk and idiosyncratic risk of FS firms, particularly of banks, savings and insurance companies. Yet, this article finds an increase in systematic risk of banks, savings and insurance companies. This outcome may be due to increased financial integration, innovation, globalization and deregulation.
Original languageEnglish
Pages (from-to)1005-1015
Number of pages11
JournalApplied Financial Economics
Volume24
Issue number15
Early online date2 Jun 2014
DOIs
Publication statusPublished - 1 Aug 2014
Externally publishedYes

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