The Impact on International Investors of the Sarbanes Oxley Act: Is it Smooth Sailing or Rough Seas Ahead? Are the Costs to Corporate Cultures Worth the Benefits to Investors?

By Nicole C. Garsombke, Diane J. Prince and Thomas W. Garsombke.

Published by The Organization Collection

Format Price
Article: Print $US10.00
Article: Electronic $US5.00

The Sarbanes Oxley Act recently enacted in the United States has brought about some fundamental changes in the way business is conducted. One such area is the creation of forward looking statements and the scrutiny the law legislates in terms of the accounting and auditing processes for any U.S. based firm. As a response to the increasing scandals with accounting and financial irregularities as well as overall ethical practices by managers, the U.S. Congress passed legislation to thwart future Enrons and World Coms scandals. Some believe the legislation is too stringent on U.S. firms, costs too much to implement and is actually turning foreign investment away from the U.S. This paper researches the topics and issues impacted by the Sarbanes Oxley Act, tells the responses and changes made in U.S. firms thus far and analyzes the response by international investors since the enactment of the SOX legislation. In addition, the authors give some thoughts about future actions to be taken by managers and legislators to build back investor confidence in the U.S. marketplace.

Keywords: Sarbanes Oxley (SOX), Scandals, Foreign Investors, International Investments, Ethics

The International Journal of Knowledge, Culture and Change Management, Volume 7, Issue 10, pp.61-72. Article: Print (Spiral Bound). Article: Electronic (PDF File; 616.070KB).

Nicole C. Garsombke

Lawyer, Mergers and Acquisitions Division, Paul Hastings Law Firm, Atlanta, Georgia, USA

Nicole C. Garsombke is a practicing lawyer in the International Mergers and Acquisitions Department at Paul Hastings Law Firm in Atlanta, Georgia. She has published notably in the Georgia Law Review.

Dr. Diane J. Prince

Associate Dean, School of Business, Clayton State University, Morrow, Georgia, USA

Dr. Diane J. Prince is Associate Dean in the School of Business at Clayton State University, Morrow, Georgia. Previously, she was the Dean of the School of Business and Mass Communication at Brenau University and a business professor. Her publications have appeared in Organizational Dynamics, The Small Journal of Management, Planning, The Journal of Business, The International Journal of Business, and The International Journal of Value Management. She has done consulting work in Asia, Central America and the Ukraine and has taught in Executive MBA Programs.

Dr. Thomas W. Garsombke

Associate Professor of Marketing and Management, School of Business, Claflin University, Orangeburg, SC, USA

Dr. Thomas W. Garsombke is an Assoc. Prof. of Marketing and Management in the School of Business at Claflin University. His doctorate is from Northeastern University in Boston and his MBA is from the University of Maine. He has so-authored a Case Analysis textbook and a Strategic Management and Marketing Cases textbook in addition to a variety of academic journal publications.


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