THE STUDENT PERCEPTIONS ABOUT THE IMPACT OF THE SARBANES OXLEY ACT: AN EMPIRICAL ANALYSIS

Abstract

This study analyzes business and non-business students’ perceptions of the impact and importance of the Sarbanes Oxley Act of 2002 (SOX). A survey containing 18 SOX-related items and 8 demographic items was distributed to upper division undergraduate students in business and sociology and graduate business students at an AACSB and SACS accredited Southeastern business school during fall of 2008. T-tests for equality of means were used to compare the responses by student type (graduate or undergraduate) and by major (business or non-business, accounting or management, etc.). Business majors perceived SOX as one of the most important pieces of legislation for the accounting profession and generally revealed a positive perception of SOX’s impact. Graduate business students perceived SOX as one of the most important pieces of legislation for the financial markets and generally revealed a more positive perception of SOX’s impact than undergraduate business students. Business majors felt SOX had increased corporate transparency, transformed corporate governance for the better, restored investor confidence and financially impacted companies. Business majors also felt that SOX had increased management and auditor liabilities and implemented harsher punishment for CEOs. Non-business majors exhibited less positive perceptions of SOX perhaps due to their non-familiarity with SOX. An important implication of this study is that all business students need to appreciate business processes more and understand the importance of internal controls better.