FINANCIAL STAKE AND CPA SUPPORT FOR EXPANDING SARBANES-OXLEY TO NONPUBLIC ENTITIES

This paper examines the relationship of CPAs' financial stake in the practice of public accounting and their support for expanding Sarbanes-Oxley (SOX) to cover nonpublic entities. SOX represents a significant regulatory change relative to the CPA profession and is aimed at improving corporate governance and the audit function. Findings indicate that CPAs with higher financial stake in the practice of public accounting support expanding SOX to nonpublic entities less than CPAs with lower financial stake. The current study strengthens prior research which shows financial stake to be a significant factor relative to CPAs' preferences toward changing ethical issues. CPAs are required to be independent and objective in their judgments and findings that financial stake significantly factors into their support for changing ethics-based regulation must be viewed with concern. Future research should look closely at the financial stake variable relative to CPA views to determine whether self-interest among CPAs may be jeopardizing the public interest. [PUBLICATION ABSTRACT]