we find that audit
committee support for an auditor-proposed adjustment is significantly higher in the
post-SOX period. Additional analyses reveal that the effect of SOX differs between audit
committee members who are CPAs versus non-CPAs. Specifically, the greater audit committee
member support for the proposed adjustment post-SOX is attributable to
members who are CPAs. In general, audit committee members in the post-SOX period
feel more responsible for resolving the accounting issue, perceive that audit committee
members have greater expertise to evaluate the accounting issue, and also are more
concerned with reporting accuracy and a need for conservative financial reporting than
those in the pre-SOX period. We also find that post-SOX respondents who support the
auditor’s proposed adjustment have more favorable views of the benefits of SOX, and
they believe more strongly that audit committees in the post-SOX period are more
conservative and have more power than they did pre-SOX. We discuss implications
and avenues for future research.