The impacts of Sarbanes-Oxley on independent auditing

Abstract

Successive scandals of manipulation of open corporations' financial statements in the United States, in recent years, motivated their regulatory authorities to enact the Sarbanes-Oxley Act ("Sox"). This established a strict set of rules for the primary figures involved in the corporate world, including managers, auditors, lawyers and market analysts. Specific rules that introduced innovations, such as the creation of a supervisory body (PCAOB), new independence rules and renewed auditing standards were designed for independent auditors. The research covered the main goal of analyzing the impacts (dependent variables) independent auditors perceived after the introduction of the American law (independent variable), through a questionnaire. The research methodology combines a bibliographic review and a survey of how independent auditors perceived the Sox Act impacts. According to the participants, the Sox Act increased the supervision on the profession; added more credibility to the financial statements, to the work of auditors and accountants, and contributed to the raising of audit fees.