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A Case Study of the Voluntary Adoption of SOX-Inspired Reforms at the University of Pittsburgh

Phipps, Theresa (2018) A Case Study of the Voluntary Adoption of SOX-Inspired Reforms at the University of Pittsburgh. Doctoral Dissertation, University of Pittsburgh. (Unpublished)

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In enacting the Sarbanes-Oxley Act of 2002 (SOX), Congress established sweeping auditing and financial regulations for public companies in order to prevent fraudulent accounting activities. While far-reaching in many respects, SOX also has limitations in its scope. Among those is that SOX applies only to publicly traded corporations. However, the accounting practices that SOX seeks to regulate are shared by nonprofit institutions of higher education, which are also highly susceptible to the damaging consequences of fraud. Much like publicly traded corporations, nonprofit institutions of higher education also confront issues of auditor independence, corporate responsibility, enhanced financial disclosure, and accountability for financial results. But because implementation of SOX reforms, particularly those contained in Section 404, which strengthens internal control procedures, is resource-intensive and very costly, many nonprofit colleges and universities have not voluntarily adopted the full slate of SOX requirements.
Utilizing a case study method, I gained the following insights into the results of voluntary implementation of SOX Sections 301 (requiring companies to set up procedures for employees’ confidential, anonymous submission of concerns about questionable accounting and auditing), 302 (requiring the principal executive and financial officers of a public company to certify in their company's annual and quarterly reports that such reports are accurate and complete and that they have established and maintained adequate internal controls for public disclosure), and 404 (requiring companies to annually test the effectiveness of internal controls over financial reporting and the external auditors to audit the internal controls) at the University of Pittsburgh. First, SOX-inspired reforms enhanced a culture of accountability and strong control environment. Second, the costs of implementing SOX decreased over time. After the initial implementation, maintenance and monitoring of the established internal controls does not require as many employees. Third, Pitt developed tools that allowed the University to gain assurance that internal controls were working properly by requiring department heads and central personnel to take ownership of their departments’ internal controls.


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Item Type: University of Pittsburgh ETD
Status: Unpublished
CreatorsEmailPitt UsernameORCID
ETD Committee:
TitleMemberEmail AddressPitt UsernameORCID
Committee ChairMcClure,
Committee MemberTananis,
Committee MemberWeidman,
Committee MemberWingrove,
Date: 27 September 2018
Date Type: Publication
Defense Date: 21 June 2018
Approval Date: 27 September 2018
Submission Date: 7 August 2018
Access Restriction: 5 year -- Restrict access to University of Pittsburgh for a period of 5 years.
Number of Pages: 116
Institution: University of Pittsburgh
Schools and Programs: School of Education > Administrative and Policy Studies
Degree: EdD - Doctor of Education
Thesis Type: Doctoral Dissertation
Refereed: Yes
Uncontrolled Keywords: SOX
Date Deposited: 27 Sep 2018 14:28
Last Modified: 27 Sep 2023 05:15


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