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An historical perspective on the Sarbanes‐Oxley Act

An historical perspective on the Sarbanes‐Oxley Act Purpose – The purpose of this paper is to provide an historical perspective to help understand the forces that resulted in the Sarbanes‐Oxley Act. It aims to provide an historical vindication of the taxonomy developed by Charles Conrad in 2003. Design/methodology/approach – The paper applies a framework developed by Charles Conrad in 2003 to explain the events that led to the corporate meltdown in 2002‐2003 and compare it to a similar scandal in the insurance industry at the beginning of the twentieth century. Findings – A number of parallels were found between the two incidents. Additionally, the framework developed by Charles Conrad in 2003 was vindicated by the historical comparison. Lessons for practicing managers, domestic and international, are presented along with avenues for possible future research. Practical implications – Recent changes in the political landscape, particularly in the USA, may indicate that Sarbanes‐Oxley will, indeed, be with us for a longer, rather shorter time. However, the real lesson for managers and scholars of management may be to concentrate on the three trends that foreshadow scandals and meltdowns to prevent similar problems, with their inevitable legal backlash in the future. Originality/value – This paper uses the framework developed by Charles Conrad in 2003 to explore to different corporate meltdowns separated by a century in the USA. Lessons learned from these incidents as well as a perspective on the probable effective life of the Sarbanes‐Oxley Act are suggested. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Management History Emerald Publishing

An historical perspective on the Sarbanes‐Oxley Act

Journal of Management History , Volume 14 (3): 10 – Jun 27, 2008

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Publisher
Emerald Publishing
Copyright
Copyright © 2008 Emerald Group Publishing Limited. All rights reserved.
ISSN
1751-1348
DOI
10.1108/17511340810880643
Publisher site
See Article on Publisher Site

Abstract

Purpose – The purpose of this paper is to provide an historical perspective to help understand the forces that resulted in the Sarbanes‐Oxley Act. It aims to provide an historical vindication of the taxonomy developed by Charles Conrad in 2003. Design/methodology/approach – The paper applies a framework developed by Charles Conrad in 2003 to explain the events that led to the corporate meltdown in 2002‐2003 and compare it to a similar scandal in the insurance industry at the beginning of the twentieth century. Findings – A number of parallels were found between the two incidents. Additionally, the framework developed by Charles Conrad in 2003 was vindicated by the historical comparison. Lessons for practicing managers, domestic and international, are presented along with avenues for possible future research. Practical implications – Recent changes in the political landscape, particularly in the USA, may indicate that Sarbanes‐Oxley will, indeed, be with us for a longer, rather shorter time. However, the real lesson for managers and scholars of management may be to concentrate on the three trends that foreshadow scandals and meltdowns to prevent similar problems, with their inevitable legal backlash in the future. Originality/value – This paper uses the framework developed by Charles Conrad in 2003 to explore to different corporate meltdowns separated by a century in the USA. Lessons learned from these incidents as well as a perspective on the probable effective life of the Sarbanes‐Oxley Act are suggested.

Journal

Journal of Management HistoryEmerald Publishing

Published: Jun 27, 2008

Keywords: Corporate governance; History; Laws and legislation; United States of America

References