The Sarbanes-Oxley Act 2002 aimed to improve listed companies' financial reporting standards and protect shareholders' interests. However, most of the provisions are perceived to be costly to U. S. issuers and benefits of the Act have continued to be the subject of much debate. This thesis utilises a unique corporate governance dataset that covers both the pre- and post-SOX periods and attempts to first, investigate what changes have there been in corporate governance practices since SOX was implemented, and second, to analyse the consequences of any changes in corporate governance practices post-SOX, and whether these changes are beneficial to shareholders. To achieve these two
objectives, the thesis investigates the impact of SOX in four empirical chapters.
The main findings of this thesis suggest that companies opted to follow a box-ticking procedure in selecting their corporate governance structures post-SOX. SOX did not achieve its objectives of improving financial reporting quality,but it had, albeit unintentionally, enhanced corporate value for some firms. Overall audit conu-nittee effectiveness decreased during the SOX period, but it
increased in the post-SOX period, which indicates, in terms of corporate governance, SOX was beneficial to shareholders because it improved the overall audit committee effectiveness. Finally, earnings informativeness improved after SOX was enacted. However, this improvement may not be attributable to the changes in audit committee effectiveness.
The thesis concludes that SOX improved U. S. companies' financial reporting quality, financial account usefulness and audit committee effectiveness. However, the improvements of financial reporting quality and financial account usefulness seemed not to be attributable to the changes in corporate governance practices, but it was more likely to be attributable to other internal control
requirements, i. e. Section 404 "Assessment of internal control", Section 302 "Internal control certifications" and Section 201 "Services outside the scope of practice of auditor".