The Sarbanes-Oxley Act and Its Impact on European Companies

Inhaltsverzeichnis (Table of Contents)

• FINANCIAL FRAUDS
• ACKNOWLEDGEMENTS
• TABLE OF CONTENTS
• TABLE OF FIGURES
• ABBREVIATIONS
• ABSTRACT
• INTRODUCTION
• PROBLEM STATEMENT
• HISTORY
• Enron
• WorldCom
• Parmalat
• SUMMARY
• THE SARBANES-OXLEY ACT OF 2002
• CONTENT
• Title I - Public Company Accounting Oversight Board
• Title II - Auditor Independence
• Title III - Corporate Responsibility
• Title IV - Enhanced Financial Disclosures
• Title V - Analyst Conflicts of Interest
• Title VI - Commission Resources and Authority
• Title VII - Studies and Reports
• Title VIII - Corporate and Criminal Fraud Accountability
• Title IX - White-Collar Crime Penalty Enhancements
• Title X- Corporate Tax Returns
• Title XI - Corporate Fraud Accountability
• INTERNAL CONTROL SYSTEM
• Definition
• Objectives
• Committee of Sponsoring Organizations of the Treadway Commission
• SUMMARY
• THE EMPIRICAL SURVEY
• Literature REVIEW
• Sarbanes-Oxley - Beyond Planning
• Sarbanes-Oxley Implementation Survey
• Insights on Today's Sarbanes-Oxley and Corporate Governance Challenges
• Internal Audit - Sarbanes-Oxley Survey
• Business Ethics and Compliance in the Sarbanes-Oxley Era
• Sarbanes-Oxley Compliance Costs Exceed Estimates
• Sarbanes-Oxley Section 404 Work – Looking at the Benefits
• Delisting and Deregistering of German Issuers in the USA
• Summary
• METHODOLOGY
• Research Intention
• Definition of Information Needed
• Implementation of Variables
• Information Collection
• Data Preparation
• Interim Cognition
• Part Company Based Questions
• Part II - Implementation Based Questions
• Part III - Cost Based Questions
• Part IV - Benefits Based Questions
• Cognition Utilization
• SUMMARY
• EXECUTIVE SUMMARY

Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)

This thesis investigates the impact of the Sarbanes-Oxley Act (SOA) on European companies, specifically focusing on how the Act's provisions affect the internal control systems and compliance processes of European firms listed on American stock exchanges. The research aims to analyze the implementation challenges, costs, and perceived benefits associated with SOA compliance for European companies, drawing on a comprehensive empirical survey of European businesses.

• The impact of the Sarbanes-Oxley Act on European companies
• Internal control systems and compliance processes
• Implementation challenges, costs, and benefits of SOA compliance
• The implications of SOA for European corporate governance
• A comparative analysis of SOA compliance experiences across different European industries

Zusammenfassung der Kapitel (Chapter Summaries)

• The introductory chapter delves into the history of financial fraud, outlining key corporate scandals such as Enron, WorldCom, and Parmalat, which ultimately led to the enactment of the Sarbanes-Oxley Act. It lays the groundwork for understanding the rationale behind the Act's creation and its intended purpose in preventing future financial misconduct.
• Chapter 3 provides a detailed explanation of the Sarbanes-Oxley Act itself, focusing on each of its eleven titles and their corresponding provisions. It explores key areas such as the establishment of the Public Company Accounting Oversight Board, auditor independence, corporate responsibility, enhanced financial disclosures, and the regulation of analyst conflicts of interest. The chapter further examines the concept of internal control systems, outlining their definition, objectives, and the framework established by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
• Chapter 4 delves into the empirical research methodology used to gather data on the impact of SOA on European companies. It presents a comprehensive literature review summarizing existing research on the implementation and effects of the Act, including perspectives on compliance costs, benefits, and the challenges faced by European firms. The chapter elaborates on the research design, data collection methods, and the questionnaire used to collect insights from European companies regarding their experiences with SOA compliance.

Schlüsselwörter (Keywords)

The primary keywords and focus topics of this thesis include Sarbanes-Oxley Act, internal control, compliance, corporate governance, financial reporting, accounting, auditing, European companies, empirical research, and survey methodology. The study examines the practical implications of the SOA for European businesses, delving into their compliance experiences, costs, and perceived benefits. The research aims to provide a comprehensive analysis of the Act's impact on European corporate governance and the challenges faced by companies in navigating the complex regulatory landscape.

Frequently Asked Questions

What is the Sarbanes-Oxley Act of 2002 (SOA)?

The Sarbanes-Oxley Act is a US federal law enacted in response to major corporate and accounting scandals like Enron and WorldCom to improve financial disclosures and prevent fraud.

How does the SOA affect European companies?

European companies listed on US stock exchanges must comply with SOA provisions, including internal control systems and enhanced corporate responsibility standards.

What are the main findings of the empirical survey in the thesis?

Findings include that smaller companies struggle more with compliance, management involvement is crucial, and most firms have implemented whistleblower hotlines.

Do compliance costs for the SOA outweigh the benefits?

In 2004, many companies felt costs exceeded benefits, but a positive trend towards recognizing the benefits of improved governance was identified over time.

What is the role of the Internal Control System (ICS) in SOA?

The SOA requires companies to maintain an effective ICS to ensure the accuracy of financial reporting, often using the COSO framework as a guideline.