Restatements Post-SOX Affect Market Less: Study

Law360, New York (October 12, 2007, 12:00 AM EDT) -- While a company will still see its stock price drop when it announces plans to restate its financial results, the decline is less severe since the Sarbanes-Oxley Act took effect, according to an academic paper by two economists.

A pair of Public Company Accounting Oversight Board economists released a study Thursday that indicates the market is not as unstable after a company discloses that financial restatements are on the horizon.

The study, which is scheduled for discussion at a PCAOB advisory group meeting on Thursday, found...
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