One important question about SOX that Henry Butler & I discuss in our recent AEI paper, but that generally gets too little attention, is whether, even assuming some of the SOX reforms were justified, SOX was necessary to get firms to adopt them. If not, SOX's adoption of these reforms was at best not beneficial and at worst harmful to the extent that it forces the reforms on firms they aren't suited for.
Aggarwal and Williamson have some evidence of this in Did New Regulations Target the Relevant Corporate Governance Attributes?
See full Article.
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