Information Disclosure and Regulatory Compliance: Economic Issues andResearch Directions
The Sarbanes Oxley Act (SOA) introduced significant changes to financialpractice and corporate governance regulation, including stringent newrules designed to protect investors by improving the accuracy andreliability of corporate disclosures. Briefly speaking, it requiresmanagement to submit a report containing an assessment of theeffectiveness of the internal control structure, a description ofmaterial weaknesses in such internal controls and of any materialnoncompliance. Such mandatory regulations can have some broaderramifications on firm profitability, market structure and socialwelfare, many of which were unintended when policy makers firstformulated this Act. Moreover, the tight coupling between complianceactivities, information disclosure and IT investments can haveimplications for IT governance because of its potential to changerelationships between technology investments and business. This articleaims to provide some intuitive insights into the trade-offs involved forfirms in disclosure of such information, and gives an overview of someresearch questions that would be of interest to academics, industryexecutives and policy makers alike.
Year of publication: |
2008-11-06
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Authors: | Ghose, Anindya |
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