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Do Changes in Internal Controls Under Section 404 Influence Investor Perceptions?

Do Changes in Internal Controls Under Section 404 Influence Investor Perceptions?

Summary

Accounting and Reporting Audit and Assurance Management Accounting

This study investigates how Section 404 of the Sarbanes-Oxley Act's deregulation, specifically the 2007 amendments that eased internal controls and reporting requirements, affects investor perceptions. The researchers explore market reactions to pivotal events leading up to the regulatory changes, assessing whether investors perceive these changes as detrimental to financial reporting quality.