The Effects of the Sarbanes-Oxley Act : A Deeper Look into its Impact on Small Companies

University essay from Linköpings universitet/Företagsekonomi; Linköpings universitet/Företagsekonomi

Author: Leonard P. Iii Basak; Jonathan W. Carlson; [2011]

Keywords: ;

Abstract:

The following thesis was written by Jonathan W. Carlson and Leonard P. Basak, III for their Bachelor of Science in Business at Linkoping University, Sweden. The authors intend to determine the effects the Sarbanes-Oxley Act (SOX) has had on business. The paper outlines many possible costs of the act, with a focus on the adverse impacts it has on small companies. In order to combine new information with previous research, interviews were conducted. The purpose of these interviews is to compare and contrast the effects of SOX on firms of different sizes or structure. Through the combination of past studies and research, the authors agree that future changes to the Sarbanes-Oxley Act are needed to make it less invasive on small firms. The thesis recommends simple revisions be made that can explicate the types of firms the Act applies to. In the interviews conducted, the harmful effects of the Act are more extreme in small companies that large ones. These findings are consistent with the findings of previous research, allowing a reasonable proposal for additional revision of the Sarbanes-Oxley Act.

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