Auditing commitee or equivalent instance on the context of Sarbanes-Oxley Act: Research about the managers´s perception in brazilian companies with American Depositary Receipts – ADR´s

Abstract

Financial scandals involving American companies defied the corporate governance practices that were on action at the time of the scandals occurrence. To react against this, the authorities of the USA approved the Sarbanes-Oxley Act in 2002, followed by the necessity of more practices. Among those, there was the implementation of the auditing committees, and it affected all the non-American companies interested in the American market. In this context, the aim of this research was to investigate, according to the managers of Brazilian companies, drawers of the American Depositary Receipts – ADR’s – and obliged to attend to the Sarbanes Oxley Act of 2002 – whether the auditing committee or equivalent instance contributes or not to minimize frauds, to raise the transparency when demonstrating the accounting information and to diminish internal control shortcomings. To accomplish this goal, it was carried an empirical research with the 34 Brazilian companies at that time - drawers of the ADR’s, through a questionnaire, answered by subjects from 25 companies. The collected data were treated by Descriptive Statistics and by the Cramer and Spearman correlations. The results showed that the auditing committee was adopted by 47% of the companies. About 56,0% of the respondents stated that the auditing committee or equivalent instance participated actively, as it gave recommendations related to the evaluation of the internal control systems; 68,0% believed that the auditing committee is vital for the greatest performance of the company, 71,0% would keep it working, even if, in the future, it wasn’t necessary by the SOX.