（2006）The Impact of the Sarbanes-Oxley Act 2002 on the Information Systems of Public Companies.pdfVIP

THE IMPACT OF THE SARBANES-OXLEY ACT 2002 ON THE INFORMATION SYSTEMS OF PUBLIC COMPANIES Monica C. Holmes, Central Michigan University, monica.c.holmes@ Darian Neubecker, Plante Moran, darian.neubecker@ ABSTRACT to companies than frauds by those lower in rank [3]. The elevated stock price and other artificially inflated The Sarbanes-Oxley Act of 2002 has had a performance metrics also were tied to executive tremendous impact on large and small companies. bonus and stock option plans. These compensation The Act was intended to hold to accountability those plans give executives $millions if their companies individuals that were running the company. But the perform well. The most appealing aspect of using impact has trickled down through the accounting bonuses and stock options as executive compensation organizations and into the information systems that for companies is two-fold: (1) the stock option plans support those accounting activities. Some companies until recently were largely uncharged against have been able to take advantage of the Act through earnings—depending on the structure and consulting services, creating new systems that are circumstances, most are still significantly unrealized Sarbanes-Oxley Act compliant or even creating new in current earnings today; and (2) they supposedly computer languages to handle the new regulations.