The 2001 to 2002 corporate scandals led to the Sarbanes–Oxley Act and to various amendments to the U.S. stock exchanges’ regulations. We find that the announcement of these rules has a significant effect on firm value. Firms that are less compliant with the provisions of the rules earn positive abnormal returns compared to firms that are more compliant. We also find variation in the response ac...

Recent changes to the law governing the obstruction of justice have coincided with a string of highly visible prosecutions, including those of Martha Stewart,1 Frank Quattrone,2 and I. Lewis “Scooter” Libby, Jr.3 Among such prosecutions, that of the accounting firm Arthur Andersen LLP is foremost in legal significance. From the start, the government and Arthur Andersen disputed how the jury wou...

Sarbanes-Oxley (SOX) Act stipulates specific roles for the CEO, CFO, and the Auditor. However, the role of the Chief Information Officer (CIO), usually in charge of IT governance (ITG), is implicit. This is despite the fact that in many firms, accounting and financial information and reporting systems either incorporate or are embedded in sophisticated information systems. Through a discussion ...

We study the effect of earnings manipulation on incentives within the corporate hierarchy. Division managers have to be compensated for not blowing the whistle when top managers manipulate earnings. We show that it is easier for division managers to prove top management’s manipulations when the performance of their own division is low. Earnings manipulation therefore undermines middle managers’...

The Sarbanes-Oxley Act introduces a new set of requirements into software development. Corporations need to assess their internal control effectiveness for business processes to show compliance with the act. This paper proposes a conceptual framework for integrating SarbanesOxley compliance needs into software development by mapping the activities of an established framework for internal contro...

We present a pragmatic method for management of risks that arise due to spreadsheet use in large organizations. We combine peer-review, tool-assisted evaluation and other pre-existing approaches into a single organization-wide approach that reduces spreadsheet risk without overly restricting spreadsheet use. The method was developed in the course of several spreadsheet evaluation assignments fo...