Differential effect of the sarbanes-oxley act on individual and institutional investors
- 주제(키워드) Individual investors , Institutional investors , Investor sophistication , The sarbanes-oxley act of 2002
- 등재 SCOPUS
- 발행기관 CIBER Institute
- 발행년도 2016
- 총서유형 Journal
- URI http://www.dcollection.net/handler/ewha/000000125477
- 본문언어 영어
- Published As http://dx.doi.org/10.19030/jabr.v32i2.9593
초록/요약
This study investigates the differential effect of the Sarbanes-Oxley Act of 2002 (“SOX”) on unsophisticated individual investors and sophisticated institutional investors. I examine the relationship between abnormal stock returns around quarterly earnings announcements before and after SOX and investor sophistication. Empirical test results show that SOX positively affected stock returns reaction around the quarterly earnings announcement, consistent with prior literature. However, the increased stock returns reaction in the post-SOX period appears to be unrelated to individual investors. I find that the impact of SOX on institutional investor reaction to earnings announcement is statistically significant, whereas individual investor reaction to earnings announcement is not affected by SOX. This suggests that institutional investors have improved on the extent to which earnings information is efficiently priced after SOX, but not individual investors. These findings are important because the differential effect of the accounting disclosure regulation on investors has received little attention in the literature. © by author(s).
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