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The thesis analyzes moral hazard in corporate governance and brings in actual theoretical knowledge on the topic. It examines four examples of the companies which went bankrupt due to moral hazard of their top management: Enron, WorldCom, Parmalat and IPB. All case studies are assessed in accordance with OECD Principles of Corporate Governance. At the end of the thesis, there are mentioned impacts on legislature and suggestions of possible solutions.

The work deals with ethic porblems of audit profession and their violations. It focus on the definition of the ethical rules in the normative sources. It analyzes accounting scandals in the U.S. at the turn of the 20th and 21 century and their impact. Finally, it discusses the Sarbanes-Oxley Act of 2002, as an main effect of these scandals.

This diploma work desribes relation between external and internal audit. The theoretical part includes definitions of audit, types and targets of audit and cooperation between external and internal auditors. The diploma work focuses also on processes of external and internal audit. The last chapter of theoretical part describes the Sarbanes Oxley Act. The practical part narrates the theoretical knowledge on real example. For this part I choose outsourcing company Accenture Services, s.r.o.

This study uses an institutional theory perspective to examine whether significant changes to the audit work and engagement practices required under the Sarbanes-Oxley Act (SOX) lead to improved audit quality in nonprofit hospitals. Unlike their for-profit counterparts, nonprofit organizations have been subject to audits of internal controls over financial reporting and program compliance for decades under Circular A-133 of the Single Audit Act of 1984, as amended. Circular A-133 audits represent the primary accountability tool over the billions of grant dollars awarded annually by the federal government. Despite the enormity of these awards and the substantial informational effect of the audit reports, prior empirical research suggests that the quality of these audits is problematic. Using the archival data of nonprofit hospital Circular A-133 audits and related hand-collected financial data from IRS Form 990s, bivariate and multivariate analyses are conducted on a cross-sectional sample of 875 audits for 141 nonprofit hospitals with audits during both pre-SOX (2001-2004) and post-SOX (2008-2011) periods. Audit quality is inferred from discretionary accruals (Modified Jones model) and auditor-reported internal control deficiencies (reportable conditions and material weaknesses). The results indicate support for improved audit quality from the pre- to the post-SOX period for all measures of audit quality. The results are different for the measures of audit quality used to examine the association between audit firm size and audit quality. Non-Big 4 audit firms experienced a significant improvement in audit quality when discretionary accruals are used as a proxy for audit quality. Conversely, Big 4 audit firms experienced a significant improvement in audit quality when internal control deficiencies are proxies for audit quality. In the post-SOX period audit firms provide approximately the same level of audit quality regardless of firm size when discretionary accruals or material weaknesses are the proxy for audit quality. When reportable conditions are the proxy, non-Big 4 firms have higher audit quality than Big 4 firms post-SOX. Client characteristics, specifically hospital size and the interaction of leverage and risk, are attributable to differences in post-SOX audit quality. Finally, the study fails to support the hypothesis that large audit firms self-select low risk clients.

The central focus of this dissertation study is to understand the impact of the Sarbanes-Oxley Act and the factors that contribute to increased risk of fraud in order to determine why fraud may occur despite the imposed regulation of the Sarbanes-Oxley Act. The main premise of the study tests the application of the fraud triangle framework constructs to publicly traded restaurant companies during the time period of 2002-2014, using proxy variables defined through literature. Essentially, the study seeks to identify the factors that may provide the optimal criteria to engage in fraudulent or opportunistic behavior. The fraud triangle theoretical framework is comprised of the constructs of pressure, opportunity and rationalization, and has mostly been utilized by external auditors to assess the fraud risk of various companies. It has never been applied to the restaurant industry, and the proxy variables selected have never before been tested in a comprehensive model. Thus, a major contribution of this study may enable executive managers to assess the fraud triangle conditions according to the model in order to afford conclusions regarding increased risk of fraud. The study first hypothesized that the Sarbanes-Oxley Act has had a significant impact on detecting increased risk of fraud for publicly traded restaurant companies. Additionally, the study controlled for and tested the proxy variables of the fraud triangle constructs to determine if any of the variables had a significant impact on detecting increased risk of fraud for publicly traded restaurant companies. The variables tested included company size, debt, employee turnover, organizational structure, international sales growth, executive stock compensation, return on assets, the Recession, and macro-economic factors of interest, inflation, and unemployment rates. The research study adopted an exploratory research design using the case of publicly traded United States restaurant companies in order to provide a better understanding of the characteristics that may contribute to increased fraud risk. The study assumed a binary distribution of the dependent variable, increased fraud risk, measured by the incidence of a reported internal control deficiency over the testable time period. Specifically, the study employed a probit model to estimate the probability that an entity or company will be at an increased risk of fraud based on the independent variables that support and are linked to the fraud triangle framework. Additionally, the model assumes equal weight to the variables of the fraud triangle framework. Through use of the probit model, the major findings of the study were as follows: First, the Sarbanes-Oxley Act does have a significant impact on highlighting areas of increased fraud risk for publicly traded restaurant companies. Second, for the total population of restaurant companies, only the Recession, interest rates, inflation rates and unemployment rates are significant indicators of increased fraud risk. None of the internal variables were significant. However, once the data was segmented by type of restaurant, the results revealed significance of both internal and external variables. These results imply a couple of theoretical notions: first, that the Sarbanes-Oxley Act is an effective means for detecting risk of fraud for publicly traded restaurant companies when considering variables that support the fraud triangle; second, that the fraud triangle is contextual when applied to the restaurant industry because only the variables that are outside of managements control were significant. Finally, from a managerial perspective, the study provides evidence that macro-economic conditions that might affect consumer demand may increase the risk of fraud for publicly traded restaurant companies.

This dissertation examines the litigation and legal liability exposure of auditors related to the Sarbanes-Oxley Act of 2002 (SOX). Three separate studies were conducted to examine how auditor's litigation exposure is evaluated by potential litigants (lawyers), and how auditor liability is evaluated by jurors, following the bankruptcy of a client. The first study examines whether the auditor's SOX Section 404 reporting decisions influence lawyers' assessments of their litigation exposure. The second study investigates whether voluntary disclosures of significant deficiencies in internal controls within the SOX Section 404 report, and the subjectivity of the internal control judgments made by the auditor, influence jurors' perceptions of auditor liability for negligence. The third study examines how the requirements of SOX Section 302 related to audit committee independence and audit committee expertise influence jurors' perceptions of auditor independence and auditor liability for negligence. Overall, these three studies provide insights on how different provisions of SOX, specifically the Section 404 report and audit committee requirements, influence the likelihood that auditors will be sued and the likelihood that they will be held liable by a jury.

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The purpose of this dissertation is to investigate the effect of U.S. firms’ geographic location, whether urban or rural, on their corporate disclosure and governance practices. An “urban” firm is one that is headquartered in a large metropolitan area; whereas, a “rural” firm is one that is headquartered some distance from any metropolitan area. Specifically, the study examines whether there are different stock market reactions to urban and rural firms around key event dates relative to the enactment of the Sarbanes-Oxley Act (SOX) on July 30, 2002. Also, the readability and linguistic style in the Management Discussion and Analysis (MD&A) section of public company’s annual reports (Form 10-K) to the Securities and Exchange Commission (SEC) are investigated to determine whether urban and rural firms communicate information differently to investors.

Made available in DSpace on 2015-12-03T18:35:03Z (GMT). No. of bitstreams: 1 Eduardo_Carmona.pdf: 1166688 bytes, checksum: b3087541f5e157167d8a31bca6b4780e (MD5) Previous issue date: 2008-08-25 / The choice of this theme was motivated by personal interest of the author and by his presence in the area, in addition, the changes due to publication of the Sarbanes & Oxley generated great impacts on the internal audit activity in insurance companies. The general objective of the research is to examine the new skills to meet changes in the insurance market after the Sarbanes & Oxley, and aims to identify specific skills required of the internal auditor active in the insurance market and verify the perception of the internal auditor active in the insurance market on the degree of importance of these skills. In this context, this research provides the lifting of three assumptions: H1 The skills required of internal auditors working in the insurance market are equivalent to a whole; H2 Among the skills required of internal auditors working in the insurance market, technical knowledge is more important; H3 Among the skills required of internal auditors working in the insurance market, the interpersonal and communication skills are more important. To conduct this research was conducted a survey that allowed bibliographic detect the powers of internal audit in the face of demands for transparency and accountability post-publication of the law, then there was a group of integrated focus for professionals working in auditing and consulting companies insurance which enabled describe the specific skills of the internal auditor in the insurance market. As a result of the focus group pointed to 19 skills required of the internal auditor. In a second stage, was drawn up a questionnaire, where 12 were selected among the powers given by the focus group. The questionnaire was answered by 105 internal auditors. As a result of this research, identified itself as the most important skills identified were: Knowing the Sarbanes - Oxley Mastering the concepts and methodology of the audit, and know the concepts of COSO. There is also a trend that there is the possibility that number 2 (H2) presented. It can be concluded with the results achieved in this research that the impact generated by the Sarbanes & Oxley influenced directly in the execution of internal audit activities in the insurance companies and consequently the skills required in his role. / A escolha desse tema foi motivada pelo interesse pessoal do autor e por sua atua????o na ??rea, adicionalmente, as altera????es ocorridas devido ?? publica????o da lei Sarbanes & Oxley produziram grande impacto na atividade de auditoria interna em companhias de seguros. O objetivo geral da pesquisa consiste em analisar as novas compet??ncias para atender ??s mudan??as ocorridas no mercado segurador ap??s a lei Sarbanes & Oxley, bem como tem como objetivos espec??ficos identificar as compet??ncias requeridas do auditor interno atuante no mercado segurador e verificar a sua percep????o sobre o grau de import??ncia dessas compet??ncias. Nesse contexto, esta pesquisa propicia o levantamento de tr??s hip??teses: H1: As compet??ncias requeridas dos auditores internos atuantes no mercado segurador s??o equivalentes em seu conjunto; H2: Dentre as compet??ncias requeridas dos auditores internos atuantes no mercado segurador, os conhecimentos t??cnicos s??o mais importantes; H3: Dentre as compet??ncias requeridas dos auditores internos atuantes no mercado segurador, as habilidades interpessoais e de comunica????o s??o mais importantes. Para a realiza????o desta pesquisa, foi realizado um levantamento bibliogr??fico que permitiu detectar as compet??ncias da auditoria interna diante das exig??ncias de transpar??ncia e responsabilidade p??s-publica????o da lei; posteriormente, realizou-se um Focus Group integrado por profissionais de auditoria atuantes em consultorias e companhias de seguros o qual possibilitou elencar as compet??ncias espec??ficas do auditor interno no mercado segurador. Como resultado do Focus Group apontaram-se 19 compet??ncias requeridas do auditor interno. Em uma segunda etapa, foi elaborado um question??rio, em que foram selecionadas 12 compet??ncias dentre as apresentadas pelo Focus Group. Esse question??rio foi respondido por 105 auditores internos. Como resultado desta pesquisa, identificou-se que as compet??ncias mais importantes apontadas foram: Conhecer a lei Sarbanes - Oxley e dominar os conceitos da metodologia de auditoria, bem como conhecer os conceitos do COSO. Verifica-se, tamb??m, que existe uma tend??ncia ?? hip??tese de n??mero 2 (H2) apresentada. Pode-se concluir, com os resultados obtidos nesta pesquisa, que os impactos gerados pela lei Sarbanes & Oxley influiram diretamente na execu????o das atividades de auditoria interna em companhias de seguros e, conseq??entemente, nas compet??ncias exigidas em sua fun????o.