The Impact of Sarbanes Oxley on Accounting Firms and Financial Markets

Researchers at the Fogelman College of Business & Economics are investigating the impact of the Sarbanes Oxley Act on the accounting profession and financial markets.

Early evidence suggested that the Act had positive impact on both stock prices and market liquidity. The early results from the research have been published in premier accounting journals such as Contemporary Accounting Research and finance journals such as Financial Review. Continuing work examines corporate governance issues such as options backdating, earnings restatements, listing decisions, and international governance regimes.

The Sarbanes Oxley Act was signed into law in 2002 in response to a number of high-profile corporate and accounting scandals. The wide-ranging law established new or enhanced standards for all U.S. public company boards, management and public accounting firms.

The research team comprises Dr. Pankaj K. Jain (pankaj.jain@memphis.edu) and Dr. Zabihollah Rezaee (zrezaee@memphis.edu). The projects have benefited greatly from Dr. Rezaees appointment to the Public Company Accounting Oversight Board in Washington D.C. and his interaction with members of congress.