Title

The Sarbanes-Oxley Act and the Private Company Discount: An Empirical Investigation

Document Type

Article

Publication Date

12-1-2008

Abstract

While criticism of the Sarbanes-Oxley Act of 2002 (SOX) typically focuses on its negative impact on small public companies, this study uses acquisition data to empirically investigate whether the Sarbanes-Oxley Act impacts the value of private firms. This study presents strong evidence that the private firm discount was greater post-SOX. The evidence represents support for the argument that SOX has been more detrimental for private companies than for public companies.

DOI

10.1016/j.cpa.2007.03.005

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