Law Commons^™

The Nonpecuniary Costs Of Sarbanes Oxley, Nicholas V. Vakkur

Nicholas v Vakkur

Sarbanes Oxley is widely considered the most comprehensive economic regulation since the New Deal. While research has evaluated its financial costs, relatively little is known about the non-financial impact of the law upon firms. We develop six hypotheses regarding the non-financial impact of Sarbanes Oxley, incorporating learning from a comprehensive literature review across multiple disciplines. To evaluate this theory, an original survey was developed and implemented on a random sample of Fortune 500 firms (n = 206). An ordered probit model was used to quantify the results. While many economists consider business surveys to be at least as important as …

The Role Of Private Sector Investment In International Microfinance And The Implications Of Domestic Regulatory Environments, William A. Langer

William A Langer

The Role of Private Sector Investment in International Microfinance and the Implications of Domestic Regulatory Environments

By William Langer

Microfinance – the practice of providing small, working capital loans and other financial services to poor individuals unable to obtain access to commercial sources of credit – has been able to transform the lives of over 100 million microentrepreneurs and their families in various regions throughout the world. Despite this impressive achievement, microfinance currently reaches only 10% of the estimated demand for microfinance services, comprised of approximately 1 to 1.5 billion self-employed poor persons worldwide. Practitioners agree that in order to …

Going From The Frying Pan Into The Fire? A Critique Of The U.S. Treasury’S Newly Proposed Section 987 Currency Regulations, Joseph L. Tobin

Joseph L Tobin

In September 2006, the IRS proposed new regulations for taxation of currency gains and losses for U.S. corporations' foreign branches. The IRS has announced that it would like to finalize them as soon as possible, perhaps as early as the summer of 2008. The new regulations withdraw the old section 987 regulations of 1991. The IRS believes these new regulations are necessary in order to prevent taxpayers from taking "artificial" currency losses on assets such as land and machinery -- assets which do not vary with the exchange rate, according to the IRS. The new regulations propose to stop these …

Auction Rate Securities: Mechanics And Turmoil, Sachin Raval

Sachin R Raval

This study's objective was to understand the origins, mechanics and recent turmoil of the Auction Rate Securities market. Prior to the 2008 collapse, the ARS market had a successful 20-year history. Many investors believed that auction rate securities were cash equivalents with above market yields. Unfortunately, due to the credit crunch, these securities became illiquid, as no buyers were willing to take existing holders' positions. Furthermore, the clearing rate or interest rate of these securities is set through a Dutch auction. In 2006, the SEC conducted a probe of the ARS market. This probe revealed that broker/dealers prevented failed auctions …

Tax Incentives: A Solution To Economic Uncertainty, Jared A. Hermann

Jared A Hermann

The article compares current economic conditions within the United States to those conditions present in the quarters preceding the 2001 recession. The article also discusses the interrelationship between consumer confidence levels and economic activity. The purpose of this article is to address the current economic uncertainty within the United States and recommend as a solution the temporary extension of the capital gains and dividend tax cuts of the Jobs and Growth Tax Relief Reconciliation Act of 2003. Such an extension will restore confidence in the economy by incentivizing investment activity and enhancing economic growth. In light of recent developments concerning …

A Forensic Study Of Daewoo’S Corporate Governance: Does Responsibility For Its Meltdown Lie Solely With The Chaebol And Korea?, Joongi Kim

Joongi Kim

In 1999, the Daewoo Group, one of the biggest transnational conglomerates, collapsed, committing a staggering $15.3 billion in accounting fraud in the process, the largest in world history. In 2006, its chairman was sentenced to eight years in prison and a disgorgement penalty of $22.7 billion. Daewoo’s problems, however, did not remain a case isolated to Korea and their mighty, family-controlled conglomerates called “chaebol.” Daewoo’s demise foreshadowed corporate scandals that more recently ravaged confidence in financial markets around the world. Leading financial institutions, investment banks, securities analysts, accounting firms and credit agencies from around the world failed to address its …

Gatekeeper Incentive Compensation, Sharon Hannes

Faculty Working Papers

A massive wave of corporate fraud at the beginning of the twenty first century exposed the failure of corporate gatekeepers. The Sarbanes-Oxley legislation accordingly targeted gatekeepers, primarily auditors, by imposing strict regulation and enhanced independence guidelines. This legislative remedy is of disputable benefit while its costs have been huge. This paper maintains that a certain type of auditor incentive compensation could work better than regulation. Under such an alternative scheme, auditors would defer a portion of the payment they receive from the client firm, which would be used to purchase shares in the client after their tenure as auditor has …

An Assessment Of The Impact Of The Sarbanes-Oxley Act On The Investigation Violations Of The Foreign Corrupt Practices Act, Karen Cascini, Alan L. Delfavero

WCBT Faculty Publications

During the late 1990s and early 2000s, a plethora of corporate scandals occurred. Due to these corporate debacles, corporate executives have been placed under fire. In response to such unethical conduct with regard to internal practices and financial reporting, legislation has been passed in order to ensure that corporations conduct their business in an ethical manner. The purpose of this paper is to assess the connection between the Foreign Corrupt Practices Act of 1977 (FCPA) and the Sarbanes-Oxley Act of 2002 (SOx), to determine whether SOx has influenced the FCPA’s investigative violation activities by examining the number of such investigations …