CORPORATE GOVERNANCE, INTERNAL CONTROL AND THE SARBANES & OXLEY LAW: WHAT YOU WANT IS WHAT YOU GET?

Resumo

Although the potential benefits of corporate governance practices are widely reported in the leading literature, little is known about the relationship between corporate governance practices and internal controls in an emerging economy. This research examines the influence of corporate governance practices on the performance of internal controls through the lens of the Sarbanes & Oxley Act in auditing firms in Brazil. Primary data was collected from experts in the field of auditing. The results show that corporate governance practices are substantive for internal controls. Most respondents consider corporate governance practices to have a high degree of impact on improving internal controls. The results show that the state of the art is far from the state of practice, but companies are increasingly committed to implementing the main corporate governance practices in their organizations. This research fills a gap in the literature and brings significant contributions: a) it sheds light on managers in the implementation of corporate governance practices aimed at creating a transparent, equitable environment with corporate responsibility directed towards stakeholders; b) shows the relevance of corporate governance practices for internal controls; and c) extends existing studies.