Audit Committees Oversight Responsibilities Post Sarbanes‐Oxley Act

In this study we examine the oversight responsibilities of audit committees in the post Sarbanes-Oxley Act of 2002 (SOX) era. The results show that audit committee oversight responsibilities assigned and disclosed in proxy statements expanded post-SOX compared to pre-SOX. We design a survey instrument to measure the difference between the perceived oversight responsibilities of audit committee members and the oversight responsibilities actually assigned in the proxy. Our results indicate that although audit committees made a substantial commitment to increase their assigned responsibilities over the period of 2001 to 2004, they still need to do more to meet the many additional challenges facing them in a post-SOX environment. Overall, our results suggest that the intent of SOX-for audit committees to be more involved and active in the oversight role of an organization-is becoming institutionalized. These results should be interesting to policy makers, a variety of interest groups, and accounting researchers.