Title: Backdating: defining the role of auditors and corporate governance in a post SOX environment

Authors: Andrea Scarpino

Addresses: School of Management, Marist College, 3399 North Road, Poughkeepsie, NY 12601, USA

Abstract: This paper examines the implications of Sarbanes-Oxley on stock option backdating. The focus of this research analyses previous literature both pre- and post-Sarbanes-Oxley. As the literature presents, before SOX was implemented, the reporting lag for grant filings increased the degree of opportunistic behaviours subsequently increasing the likelihood of backdating. The establishment of Sarbanes-Oxley, promoting trust and transparency between companies and their respective stakeholders, sets forth additional regulations mitigating the issue of backdating. In order to contribute beyond previous studies, this paper additionally analyses the research supporting this conclusion and finds that corporate governance, internal controls, and a carefully defined role of the auditor can work in conjunction with regulations in order to further resolve additional backdating issues.

Keywords: stock option backdating; Sarbanes-Oxley; SOX; corporate governance; internal controls; auditing; auditor role.

DOI: 10.1504/IJEA.2014.063735

International Journal of Economics and Accounting, 2014 Vol.5 No.2, pp.116 - 125

Received: 08 May 2021
Accepted: 12 May 2021

Published online: 20 Jul 2014 *

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