While Sarbanes-Oxley is designed to reduce the problems caused by conflicts of interest critics say that it might diminish economies of scope and
A)reduce information in financial markets.
B)encourage IPOs in the U.S.
C)encourage smaller firms to list on the U.S.financial markets.
D)increase U.S.capital markets relative to those abroad.

Question

Quizplus · Accepted Answer

Critics of Sarbanes-Oxley argue that the costs associated with compliance with the act, such as increased audits and financial reporting requirements, may reduce the amount of information available in financial markets. This could potentially diminish economies of scope, as investors may become more cautious and reluctant to invest due to the lack of information available.

While Sarbanes-Oxley Is Designed to Reduce the Problems Caused by Conflicts