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In most firms, accounting and financial information and reporting systems are either incorporated or embedded in computer-based information systems (IS). Despite the important roles that these computer-based IS play in facilitating the SOX Act compliance initiatives, the act is silent on the roles of the CIOs, although it does stipulate specific functions for the CEOs, CFOs, and the auditors. Based on a detailed analysis of the extant literature, this article argues that IT units, under the leadership of the CIOs, contribute significantly in the procurement, design, implementation, and the governance of these computer-based IS. The paper aims to discuss these issues.

The researchers generate and empirically test hypotheses using a panel data set obtained from press releases issued by firms following the hiring of CIOs between 1999 and 2005.

The results reveal that, after the enactment of the SOX Act in 2002, many firms hired new CIOs in the post-SOX Act period. Also, many of these executives were hired to fill newly created Chief information officer (CIO) positions. The results support the argument that the SOX Act has influenced the roles of senior IT executives and IT governance.

Although this study focused on hiring trends, there are other characteristics associated with CIOs that might have an impact on corporate IT governance. Future studies could investigate whether or not, for instance, firms reported fewer IT material weaknesses before or after the hire of the CIOs.

This research presents the argument and detailed discussion that while the SOX Act does not explicitly require the CIOs to sign off on the accounting/financial statements and reports, their role is fundamental in making the firm meet the SOX Act compliance standards.

At the heart of the commentary on recent financial scandals and the legislative response in Sarbanes‐Oxley has been attention to the need for effective compliance programs at corporations to prevent misconduct. Coincident with these regulatory developments, the Federal Sentencing Commission has invited a review of the Federal Sentencing Guidelines, which are now over a decade old. One element of those guidelines, the standards for sentencing corporations, has greatly influenced thinking about effective compliance systems. This article reviews the Federal Sentencing Guidelines in a critical light and distills insights from other authorities to define the elements of an effective compliance program for any organization. The investment advisory industry is used as an example for applying the rules of good compliance.

Recent changes in corporate governance require firms to maintain boards with a majority of outside independent directors. The belief seems to be that outside independent directors will strengthen corporate boards by monitoring the actions of management and ensuring that management decisions are made in the best interests of the stockholders. This belief, however, may be founded on an assumption that has its roots in public perception and not in fact. The purpose of this paper is to determine whether or not outside independent directors strengthen corporate boards.

Five areas within corporate boards of directors, including board composition, CEO duality, audit committees, compensation committees and nominating committees, are examined. The results of studies aimed at discerning the effects that outside independent directors have on increased firm performance and shareholder wealth through strong corporate governance are discussed.

The conclusion reached is that outside independent directors do appear to strengthen corporate boards; however, more needs to be done to reestablish the market's confidence in corporate America's ability to effectively govern itself.

Best practices are discussed that can assist corporate boards in fulfilling their responsibilities to shareholders in monitoring and controlling the actions of management.

This paper is of value to management of firms, corporate directors, and investors. It demonstrates that the presence of outside independent directors alone will not solve the deficiencies exposed in corporate boardrooms. It also highlights the fact that more needs to be done to change the environment in which corporate boards operate in order to better protect shareholder interests.

With the large majority of colleges and schools of business integrating ethics into their curricula, business ethics educators must work to improve the quality of instruction and find methods that enhance student learning. Because many films now address business ethics issues, the content of these films may be used to enhance the teaching of business ethics to undergraduate and graduate business students. This chapter suggests films that may be presented in business ethics classes to illustrate the four ethical categories set forth by the accrediting body for schools of business, The Association to Advance Collegiate Schools of Business (AACSB International), in their 2004 report on ethics education in business schools: ethical decision-making, ethical leadership, responsibility of business in society, and corporate governance.

The purpose of this paper is to investigate the relationship between audit committee expertise and financial reporting quality. Since the Sarbanes Oxley Act, 2002, there has been growing interest in the research concerning audit committee expertise, especially as the Security Exchange Commission requires firms to identify their audit committee financial experts.

Based on two theories, the resource dependence theory and agency theory, the study examines the association of audit committee experts with financial reporting quality, proxied by earnings management. Samples involved 2008 financial data of 300 firms that were ranked by highest market capitalisation. In total, four types of expertise are developed based on academic qualification, professional qualification and work experience.

Presence of non‐accounting experts and accounting experts is significant to reduce the magnitude of earnings management. Other than that, leverage and firms size are also found to be significant.

The findings show RDT is prevalent in accounting or auditing domain, where there is evidence showing directors bridge firms with external resources such as expertise and experience. Subsequently, contribute to the mainstream accounting literature that the resource dependence theory is also vital in explaining situations where directors' expertise and knowledge are involved.

Recent news of corporate misconduct at Arthur Andersen, Enron, WorldCom, etc., has focused attention on ethics in business. Government, business, educational institutions, as well as professional organisations have had to rethink ways of addressing this issue. This article presents the findings of a study of attitudes toward business codes of ethics. The attitudes of Master’s‐level US business students at two different points in time, before and after recent reports of corporate misconduct, are compared to see what changes had occurred, to see whether these changes were linked to the disclosures of unethical corporate conduct, and to examine whether taking a course in ethics had an effect on attitudes.

This paper aims to investigate the roles of non-CEO inside directors (NCIDs) in the new CEO-firm matching process using the context of unplanned CEO departures when immediate CEO succession planning becomes a sole board responsibility. Although critics argue that inside directors decrease the monitoring effectiveness of a board, inside directors arguably possess superior firm-specific experience and knowledge that can be beneficial during the leadership transition.

The authors use a comprehensive, manually collected data set of unplanned CEO departures from 1993 to 2012.

The authors find that NCIDs play an important role in the CEO transitioning process. They help firms identify qualified inside replacements and provide stability as the new permanent or interim CEO. In addition, NCIDs facilitate the transfer of information and help the new external CEOs succeed. They show that the longer the NCID stays with the company, the longer the tenure of the new CEO. They also document that the presence of NCIDs improves operating and stock performance; especially when the new CEO is hired from outside of the firm.

The impact of NCIDs is particularly important when the firm hires an outsider as the new CEO. These results suggest that board composition affects frictions in the CEO labor market.

The literature has predominantly focused on the downside of having inside directors. Too many inside directors on a firm’s board is often associated with ineffective boards and entrenchment. To the contrary, the authors focus on a potential benefit of having inside directors.

The purpose of this paper is to examine the evolution of the ethical discourse of the US public accounting profession over the last century in relation to Foucault's concept of “codified discourse”. The ethical discourse of the US public accounting profession has evolved from its first code of ethics promulgated in 1917, which focused primarily on protecting the economic interests of the profession, to a position in the most recent promulgation of the code of professional conduct, which contains aspirational elements regarding ethical behavior, but which incorporates few enforceable provisions. It is therefore necessary to look elsewhere for the ethical discourse of the profession, which appears to be located more in the behaviors of accountants practicing in large international public accounting firms, in which the professional accountant becomes molded into an “ethical being” in the Foucaultian sense, as one who is self-regulated and self-formed into an ideal member of the profession.

Using Foucault's concept of “codified discourse”, the author examines changes to the code of ethics of the US public accounting profession of over a period of 100 years. The code of ethics of the US public accounting profession has been one of the primary means through which the ethical discourse of the profession has been communicated to its members. The author addresses the question whether the code of ethics has been principally directed towards protecting the public interest or serving the private interests of the profession. Extending Preston et al. and Beets, the author argues that the changes to the code of ethics have been prompted primarily by market forces and the accounting profession's desire to expand its scope of its services, thus protecting its private economic interests.

The author demonstrates that the ethical discourse of the profession can be found more in the self-forming practices of the profession rather than its code of ethics. These self-forming practices commence early in the career of a prospective accountant and shape the accountant into an idealized “ethical being” in the Foucaultian sense; not an ethical being who complies with a code of ethics, but rather an ethical being who is self-regulated and self-formed into an ideal member of the profession, one who seeks to serve clients while at the same time giving the appearance of acting with integrity and conforming to professional ideals.

The limitations of this paper are similar to those of all qualitative studies in that there is a lack of generalizability.

Most academics are unaware of the informal ethical discourse that is effectively communicated to entry level and junior accountants. Making accounting students cognizant of the actual ethical discourse that they will face in their careers may help them to better deal with the ethical challenges that they will face.

No previous research has dealt with codes of ethics in the public accounting profession as a self-forming practice, using Foucaultian terminology.

This paper aims to examine whether there is an association between the level of performance‐based incentives offered to CEOs and the composition of firms' boards of directors and the compensation committee.

Univariate tests are used to test the relation between the level of performance‐based incentives and corporate governance structures. A logistic regression analysis is used to predict the probability of CEOs receiving low performance‐based incentives when various characteristics of firms' boards of directors and compensation committees exist.

The authors find the presence of CEO duality reduces the likelihood of lower levels of performance‐based incentives offered to CEOs. Additionally, the authors find CEOs are more likely to receive lower levels of performance‐based incentives when the majority of the compensation committee members serve on less than three other boards, and when the size of the board is less than or equal to nine members.

This study is limited by the fact that the sample may not be representative of the general population of companies in the US.

Shareholders who desire to keep CEO compensation levels low may consider supporting the separation of the positions of CEO and Chairperson of the Board, as well as supporting limiting the number of other boards directors may serve, and reducing or keeping the size of the board to a maximum of nine members.

The authors have documented an association between board structure and CEO compensation. It appears that company boards are able to monitor and control the compensation level offered to CEOs.