Question

Sarbanes-Oxley Act (SOX) was introduced in 2002 by the United States Congress to fight corporate financial statement fraud. Since its implementation, there have been questions about its effectiveness. After reading the Dutillieux, Francis, and Willekens (2016) article, "The Spillover of SOX on Earnings Quality in Non-US Jurisdictions (Links to an external site.)" discuss what earnings quality is and how the concern over that quality may have led to the enactment of SOX. How does SOX (a piece of U.S. Legislation) impact companies in other countries?

A substantive initial post should be 250-500 words and answers the question presented completely and/or asks a thoughtful question pertaining to the topic.

Answer 1

By learning by the article , it was explained that in European countries , US companises incorporated in Europe has to file separate financial statements as per their local GAAP ,i.e, as per the local applicable financial statement procedures.

As the US based companies are on upper hand than the local companies, the country has decided this to improve their local earnings quality of Belgium subsidaries.

This made the US owned susidaries to improved earnings quality by checking the differences in research design , comparing quality of samples through SOX audit .

This made the flow through effect to earnings quality in non us jurisdictions