Title: Analysing some issues with SOX

Authors: Aida Sy

Addresses: School of Management, Marist College, 3399 North Road, Poughkeepsie, New York, 12601, USA

Abstract: The Sarbanes-Oxley Act legislation (the SOX) was triggered by a series of market failures that were exemplified by the bankruptcy of Enron, whose accounting errors inflated earning by almost $600 million since 1994. With assets of $62 billion, Enron was the largest bankruptcy case in US history. The Enron collapse was dwarfed several months later by the massive fraud and bankruptcy filing of WorldCom in July 2002, with $100 billion in assets. The changes in internal control required by SOX's executive arm - the Public Company Accounting Oversight Board (PCAOB) - imposed costs, that have given rise to appeals to rollback or repeal the requirements (for small firms, overseas firms, etc). One emerging technology - analytic monitoring - offers a possible answer to this impasse. It tenders a family of solutions that are potentially cheaper and more effective than traditional systems of control.

Keywords: SOX 2002; Sarbanes-Oxley Act; auditing; accounting profession; regulation; corporations; analytic monitoring; internal control.

DOI: 10.1504/IJAUDIT.2013.052249

International Journal of Auditing Technology, 2013 Vol.1 No.1, pp.18 - 25

Received: 19 Jun 2012
Accepted: 24 Jul 2012
Published online: 30 Jan 2014 *

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