Using Communication Theory to Teach SOX Reporting Requirements

ABSTRACT: This paper presents an instructional resource and provides suggestions for its implementation. The resource demonstrates a method for teaching students how communication in required SOX Section 404 reports can impact stakeholders’ perceptions of that organization. Students read portions of selected 10-K, 10-Q, and corporate annual reports in which management responds to disclosed internal control material weaknesses. Students then analyze these excerpts according to a well-known image restoration strategy. This assignment enhances written communication skills, analytical skills, research skills, and deepens students’ understanding of Sarbanes-Oxley 404 requirements and of corporate image restoration strategies. The instructional resource would be beneficial in auditing, intermediate, or advanced accounting, as well as a graduate-level accounting course.