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Decoding lessons from the Facebook Consent Decree: Does Sarbanes–Oxley foreshadow the future of privacy regulation?

Author

Listed:
  • Patrick M. Ryle

    (Dalton State College, Wright School of Business)

  • Brett L. Bueltel

    (University of Southern Indiana, Romain College of Business)

  • Mark A. McKnight

    (University of Southern Indiana, Romain College of Business)

  • Judy K. Beckman

    (University of Rhode Island)

Abstract

This paper examines the utility of the Sarbanes–Oxley Act of 2002 to assist regulators engaged in privacy policy development. By exploring best practices employed by the financial reporting industry, and the specific terms of the Sarbanes–Oxley Act of 2002, the present research offers guidance for the incorporation into privacy regulation. The paper advocates that both the FTC/Facebook Court Order and the Sarbanes–Oxley Act of 2002 should be now be considered de facto minimum standards for American privacy policy, including required CEO certifications of industry obligations, establishment and maintenance of effective internal controls, required CEO, CFO and CPO certification of control compliance, disgorgement of ill-gotten gains by organizations and executives, requirement of independent third-party compliance review as well as independence of audit committees and privacy compliance staff and, finally, the establishment of, and compliance with, a regulatory oversight board similar to the PCAOB.

Suggested Citation

  • Patrick M. Ryle & Brett L. Bueltel & Mark A. McKnight & Judy K. Beckman, 2022. "Decoding lessons from the Facebook Consent Decree: Does Sarbanes–Oxley foreshadow the future of privacy regulation?," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 19(1), pages 1-10, March.
    • Handle: RePEc:pal:ijodag:v:19:y:2022:i:1:d:10.1057_s41310-021-00124-2
    DOI: 10.1057/s41310-021-00124-2
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    References listed on IDEAS

    as
    1. Hugo van Driel, 2019. "Financial fraud, scandals, and regulation: A conceptual framework and literature review," Business History, Taylor & Francis Journals, vol. 61(8), pages 1259-1299, November.
    2. Dey, Aiyesha, 2010. "The chilling effect of Sarbanes-Oxley: A discussion of Sarbanes-Oxley and corporate risk-taking," Journal of Accounting and Economics, Elsevier, vol. 49(1-2), pages 53-57, February.
    3. Bargeron, Leonce L. & Lehn, Kenneth M. & Zutter, Chad J., 2010. "Sarbanes-Oxley and corporate risk-taking," Journal of Accounting and Economics, Elsevier, vol. 49(1-2), pages 34-52, February.
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