Thesis about Sox 2580



  • Hello everyone, i’m new here.:)
    Im from Argentina and Im finishing my career of accounting and the final work is a thesis i chose about Sox and their costos for auditing firms and for companies (all looking to Argentina firms who participates in the US stock market).
    I wanted to focus on making surveys for these companies and interviews with someone in every company to ask for how did they comply with sox, what costs did they have, etc. Also make surveys and interviews for auditing firms (specially the big fours), ask them how the demands for accountants change from the implementation, etc. With these results i wanted to make charts and graphs and show how their costs increased and what opinions do the different companies have about SOX (e.x.: after the implementation did they notice any benefit form SOX?).
    I’ve never done this but my teacher (which is a member of PWC) told me it would be very hard to make interviews, in companies and in auditing firms.
    So i’m trying to make an alternative to my thesis, still keeping my objective, in case that i fail making interviews. So my questions are…
    can i look into balance sheet and other accounting documents and get good information about the costs that SOX had?
    is that hard to get an interview? some say it is because somepeople don’t want to give out info.
    any other method you would try to get info for this objective? what do you think of the thesis?.
    (some said i should quit and change subject of thesis, others tell me that if i get an interview it could be a good reference for future jobs, but i don’t know, i’m just a student).
    THANKS…



  • Hi Kalkanor,
    I am also doing a thesis on the Sarbanes-Oxley Act. This forum blocks links, so I have shortened them and you need to insert the usual http://www at the beginning.
    You can find the Argentinian issuers that use the public capital market of the U.S. and are required to file their annual reports on form 20-F with the U.S. Securities and Exchange Commission in 2007 under the following link:
    sec.gov/divisions/corpfin/internatl/foreigngeographic2007.pdf
    You can find the names of Argentinian companies in prior years in the following list: sec.gov/divisions/corpfin/internatl/companies.shtml
    You can look up information on a company using sec.gov/edgar/searchedgar/companysearch.html by entering the name of the company and then by entering the form type (e.g. 20-F for annual reports and 20-F/A for amendments/restatements to annual reports). Items 15, 16 and 18 on the forms will be very interesting for you.
    sec.gov/about/laws/soa2002.pdf Sarbanes-Oxley Act
    sec.gov/rules/final/2008/33-8934.pdf latest postponement of section 404
    sec.gov/spotlight/soxcomp.htm rules for section 404
    sec.gov/spotlight/sarbanes-oxley.htm rules for SOX sections
    ecfr.gpoaccess.gov/cgi/t/text/text-idx?sid=f43cb060add3744ca8bd0c3ad04d4d28-and-c=ecfr-and-tpl=/ecfrbrowse/Title17/17tab_02.tpl is the Code of Federal Regulations (only add http:// but do not insert www before it)
    You can make an easier thesis that does not depend on the willingness of companies to respond by focusing on the legal requirements (the law and the regulations) and then by looking at the annual reports for the years 2002 - 2008 to make statistics of actual disclosures, such as if disclosure controls and procedures was effective, if management’s assessment of internal control over financial reporting was effective, if the auditor’s opinion on ICFR was effective, if there were any restatements of the financial statements, if the audit fees and audit-related fees increased in the years with a section 404 audit by the auditor, if the audit committee contained a financial expert, etc. There is also a lot of research on other factors that drive audit fees that can be used to isolate the impact of section 404 on audit fees if you want to complicate your work and work with statistical regression models that use multiple variables. I recommend to limit your work to sections 302, 404 and 906.
    There were 22 Argentinian issuers in 2000, 25 in 2001, 24 in 2002 (just after the enactment of the Sarbanes-Oxley Act). Immediately in the next year the number of issuers dropped to 15 and then to 14 in 2007. You can investigate if the issuers delisted from U.S. stock exchanges (on form 25) and deregistered their securities from the SEC (on form 15). If the companies published a press release why they did it, you can find it on form 6-K or they may mention it in the annual reports on form 20-F.
    Good luck and post further questions if you need help,
    Georg



  • thanks a lot for your answer Georg, this will help me a lot, really.
    When you tell me 'Items 15, 16 and 18 on the forms will be very interesting for you. ’ to what are you referring to?.
    I find very interesting to analyze the annual reports, but will i get info about, for example, if the disclosure controls were effective? or will i get only numerical data?.
    if a company uses the public capital market of the US, does that NOT necessarily mean that they are in the us stock exchange?
    Lastly, those annual reports can i find them on sec.gov?
    Really thanks, this new ideas you gave me will help me focus on other issues, thanks again.



  • Amigo,

    When you tell me 'Items 15, 16 and 18 on the forms will be very interesting for you. ’ to what are you referring to?.
    Item 15 of an annual report on form 20-F contains:

    1. management’s assessment of the effectiveness of the disclosure controls and procedures
    2. management’s assessment of the effectiveness of internal control over financial reporting
    3. the auditor’s opinion on the effectiveness of internal control over financial reporting
    4. material changes in internal control over financial reporting during the year
      Item 16 contains information on the audit committee and on the amount of audit fees.
      Item 18 contains the consolidated financial statements and the auditor’s audit report with the audit opinion.

    I find very interesting to analyze the annual reports, but will i get info about, for example, if the disclosure controls were effective? or will i get only numerical data?.
    YES. See above.
    if a company uses the public capital market of the US, does that NOT necessarily mean that they are in the us stock exchange?
    No it is not necessary that they are listed on a stock exchange in the U.S. There are two other ways of using the PUBLIC capital market of the U.S. If equity securities (shares, options based on shares, etc.) are traded over-the-counter in the U.S. (e.g. on the Over-the-counter bulletin board of the NASD) and if the company has more than 10 million USD or 500 or more holders of record of the equity securities and is not able to use any of the exemptions, it needs to register the securities with the U.S. Securities and Exchange Commission and is subject to the Securities Act and the Sarbanes-Oxley Act. In addition, if securities are publicly offered in the U.S., it needs to register the securities with the U.S. Securities and Exchange Commission and is subject to the Securities Act.
    Lastly, those annual reports can i find them on sec.gov?
    If you read my last post, you will see that I included a link and mentioned that you can find the annual reports on form 20-F there.


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