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The Sarbanes-Oxley Act is legislation enacted as a result of the financial criminal wrongdoings of companies such as Enron and WorldCom. As a result of such wrongdoings, the government intervened and legislation was passed in 2002 (the Sarbanes-Oxley act of 2002).Although the act only applies to publicly traded companies, many institutions, including institutions of higher education, have adopted the "best practices" of the Sarbanes-Oxley Act. The concept underpinning the "best practices" is that transparency, accountability and ethical conduct in financial policies and practices are prevalent in every organization, and institutions of higher education are not exempt.The research findings from our inquiry into institutions of Higher Education indicated that many of the institutions of higher education that implemented the best practices did so because they thought it was the "correct thing to do"- implying that best practices of the Sarbanes-Oxley Act - transparency, accountability and ethical conduct in financial polices and practices should be adopted.As a second step, this study attempts to qualitatively determine why institutions of higher education decided to implement any of the best practices. What, if any perceived benefits were gained, and if the institutions believed that they have achieved those benefits as of the time of the interviews.The findings made it clear that there is a general sense that implementing the best practices of Sarbanes-Oxley is important and the right thing to do. The implications of implementing the best practices of Sarbanes-Oxley will show employees and others outside the institution that the institution wants to do the right thing, that accountability and transparency are important. Also, it will likely help establish an ethical culture within the institutions of higher education through the institution's code of conduct that improper behavior will not be tolerated.Based on current findings, we postulate that institutions of higher education that have implemented the best practices of Sarbanes-Oxley will be better poised should future regulation be enacted. Also, we expect that funding agencies will consider positively the fact that there are organizations that are exercising their fiduciary responsibilities by implementing the best practices of Sarbanes-Oxley. |
