SOX Center

From University News Services:

While corporate executives say their businesses are groaning under the weight of complying with Sarbanes-Oxley regulations, two University of Iowa business professors have found that most investors cheered the law during its early days.

Research by Sonja Rego and Haidan Li in the Tippie College of Business shows that stock market values increased significantly as a result of the reforms imposed by the Sarbanes-Oxley Act in July 2002. The two authors said that while the law may impose burdens on businesses, it has restored investor confidence in a market that was battered by a six-month long string of corporate scandals from Enron to WorldCom.

Their research also found that market values increased even more significantly for those corporations that were thought to have been the most aggressive in managing — and occasionally manipulating — their earnings in order to artificially inflate their stock price.

press-citizen: UI researches show gains from Sarbanes-Oxley