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Adoption of Sarbanes-Oxley Measures by Nonprofit Organizations: An Empirical Study
Venkataraman M. Iyer,
Ann L. Watkins, University of North Carolina at Greensboro
ABSTRACT. This paper reports the results of a survey of 202 nonprofit organizations in an effort to determine the degree to which these organizations have begun to voluntarily adopt provisions of the Sarbanes-Oxley Act of 2002 (SOX). We believe that this research is timely and important as several states are considering implementing regulation that would have implications for stricter accountability measures for nonprofit organizations. In addition to providing descriptive statistics that indicate the degree to which nonprofit organizations are voluntarily adopting SOX-like measures, results of this study suggest that nonprofit organizations with larger, independent board of directors who engage in a full audit are more likely to have an audit committee. Also, organizations requiring full audits with an internal audit department are more likely to have formal mechanisms for assessing the proper functioning of their internal control systems.
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