An International Meeting of the American Accounting Association American Accounting Association 2006 Annual Meeting August 6–9, 2006 Washington, D.C.

Richard R. Clune
Kennesaw State University

Timothy J. Fogarty
Case Western Reserve University

Abstract: The Sarbanes-Oxley Act of 2002, through its Section 404 provision, has been said to have ushered in a new era of corporate accountability. Using the theoretical template of institutional theory, this paper posits hypotheses that study the expression of isomorphic forces upon early compliance action, and ultimately upon the desired objective of the act. Data collected from a cross-section of chief audit executives show that coercive and two types of normative influence (exerted by external auditors and consultants) were related inversely to the magnitude of resources committed. Fewer compliance resources associated with an improvement in the state of internal control illustrates an effectively loosely coupled situation.

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