Accounting Professor’s Research Examines Effects of Sarbanes-Oxley

A study co-authored by Hollis Ashbaugh-Skaife, an associate professor of accounting at the University of Wisconsin-Madison School of Business, is gaining national attention due to its insights into the benefits of the Sarbanes-Oxley Act of 2002. Ashbaugh-Skaife,  along with colleagues from  the University of Texas at Austin, the University of Iowa and the MIT-Sloan School of Management, conducted an extensive study of the effects of strong internal control on firm risk The study found that firms that corrected their internal control problems, as mandated by the Act, lowered their cost of equity capital by 50 to 150 basis points.

The study’s results were summarized in a recent article on Forbes.com.

The study can be downloaded from http://papers.ssrn.com/sol3/results.cfm .