CCEG Research Agenda

A Market-based Alternative to Sarbanes Oxley Compliance Rating

Project Leader: Nicholas Vakkur

The objective of this study is theoretical as well as applied. In terms of application, it seeks to develop an index of internal control that provides detailed insight into firms' internal control processes. Currently, under Sarbanes Oxley, investor knowledge is limited to whether or not firms are in compliance with the Act, while a qualitative or nuanced understanding of firms' internal control processes is noticeably absent. From a theoretical vantage, this study seeks to evaluate the potential effectiveness and practicality of a free market based approach to corporate ethics.