Critics of the Sarbanes-Oxley Legislation argue that SOX 404 reduces the stock valuations of small firms.
Question: What is SOX 404? Specifically, how could SOX 404 reduce the stock valuations of small firms? Why is this important? Explain.© BrainMass Inc. brainmass.com June 4, 2020, 3:32 am ad1c9bdddf
There are two sides to this story. Section 404 could potentially reduce the stock value of certain small firms, and it goes hand-in-hand with what is known as the cost of compliance. Section 404 provides a comprehensive assessment of internal controls within the firm. While various internal controls can be implemented at a low cost or no cost, other internal controls are costly. This ...
This solution explains SOX 404, and how SOX 404 could reduce the stock valuations of small firms. A thorough explanation of why this is important is provided.