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

Mamiza Haq, Shams Tabrize Pathan, Mohammad Ziaul Hoque

    Research output: Contribution to journalArticleResearchpeer-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
    DOIs
    Publication statusPublished - 2014

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