Date of Award
Doctor of Philosophy
Terry L. Neal
Daniel P. Murphy, Lauren M. Cunningham, Donald J. Bruce
The Sarbanes-Oxley Act (SOX) added a multitude of financial oversight responsibilities to the audit committee of public companies. These responsibilities increased the amount of time each audit committee member needed to devote to each committee served, leading to concerns amongst regulators and the investing community that audit committees that were overboarded and serving on multiple other board seats would be unable to effectively monitor the companies they represented. I find that these concerns are undue. More overboarded audit committees have adequately adjusted to their increased workloads in the decade since SOX to such a degree that they have lower misstatement frequencies than less overboarded committees. By contracting in additional auditor effort or retaining higher quality auditors overboarded audit committees have found responses that aid in their monitoring. These responses lead to positive financial reporting outcomes when audit committees accept the limitations imposed by being overboarded. Overall, I find that more overboarded audit committees are able to remain effective monitors of the financial reporting process.
Castonguay, John Kyle, "The Association Between Audit Committee Overboarding, Audit Committee Responses to Increased Workloads, and Financial Reporting Quality After SOX. " PhD diss., University of Tennessee, 2017.