Abstract
<span style="font-family: Times New Roman; font-size: small;"> </span><p style="margin: 0in 0.5in 0pt; text-align: justify; mso-pagination: none;" class="MsoBodyText"><span style="font-family: Times New Roman;"><span style="color: black; font-size: 10pt; mso-themecolor: text1;">Our study proposes </span><span style="color: black; font-size: 10pt; mso-themecolor: text1; mso-fareast-language: KO;">firm bankruptcy prediction using </span><span style="color: black; font-size: 10pt; mso-themecolor: text1;">logit analysis a</span><span style="color: black; font-size: 10pt; mso-themecolor: text1; mso-fareast-language: KO;">fter the passage of the Sarbanes-Oxley (SOX) Act </span><span style="color: black; font-size: 10pt; mso-themecolor: text1;">using </span><span style="color: black; font-size: 10pt; mso-themecolor: text1; mso-fareast-language: KO;">2008-2009 U.S. </span><span style="color: black; font-size: 10pt; mso-themecolor: text1;">data.<span style="mso-spacerun: yes;"> </span>The results of our logit analysis show an 80% (90% with one year before bankruptcy data) prediction accuracy rate using financial </span><span style="color: black; font-size: 10pt; mso-themecolor: text1; mso-fareast-language: KO;">and other </span><span style="color: black; font-size: 10pt; mso-themecolor: text1;">data from the 10-K report in the post-SOX period.</span><span style="color: black; font-size: 10pt; mso-themecolor: text1; mso-fareast-language: KO;"><span style="mso-spacerun: yes;"> </span>This prediction rate is comparable to other data mining tools.<span style="mso-spacerun: yes;"> </span>Overall, our results show that, as compared to the </span><span style="color: black; font-size: 10pt; mso-themecolor: text1; mso-fareast-font-family: Batang; mso-fareast-language: KO;">prediction rates documented by other bankruptcy studies before SOX,</span><span style="color: black; font-size: 10pt; mso-themecolor: text1; mso-fareast-language: KO;"> firm bankruptcy prediction rates have improved since the passage of SOX.</span><span style="color: black; font-size: 10pt; mso-themecolor: text1; mso-fareast-font-family: Batang; mso-fareast-language: KO;"> Our findings shed light on the benefits of SOX by providing evidence that legislation makes the financial reporting more informative. This study is important for regulators to implement public policy.<span style="mso-spacerun: yes;"> </span>Investors may be interested in our findings to better assess company risk when making portfolio decisions.<span style="mso-spacerun: yes;"> </span></span></span></p><span style="font-family: Times New Roman; font-size: small;"> </span>
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