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Business Law, Public Responsibility, and Ethics Commons

Open Access. Powered by Scholars. Published by Universities.®

Corporate Finance

2016

Internal auditing

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Full-Text Articles in Business Law, Public Responsibility, and Ethics

What The Sarbanes-Oxley Act Does Not Include: An Examination Of The Importance Of Audit Firm Rotation, Audit Firm Credibility And Tone At The Top, Nicole Damaschi Jan 2016

What The Sarbanes-Oxley Act Does Not Include: An Examination Of The Importance Of Audit Firm Rotation, Audit Firm Credibility And Tone At The Top, Nicole Damaschi

Honors Theses

This thesis is an examination of the Sarbanes-Oxley Act (SOX) that was passed in response to a wave of accounting frauds, including Enron and WorldCom. Paul Sarbanes and Michael Oxley established SOX in an attempt to restore investors' confidence in the financial statements of publicly traded companies. However, there are critical elements of financial reporting that it fails to address, like audit firm rotation, audit firm credibility and management's tone at the top. Mandatory audit firm rotation and credible audit firms are believed to result in high-quality audits while management's tone at the top is reflected through the ...