The Sarbanes-Oxley Act and Effective Resource Management: A single case study of the Redeemed Christian Church of God, North America

Financial controls have proven to be inadequate and ineffective in nonprofit organizations over the years. Such organizations have been facing the risk of asset misappropriation and mismanagement thereby suggesting the need for government to consider legislating against possible scandals. These and many led to the enactment of the Sarbanes-Oxley Act in July 30, 2002 in direct response to the corporate and accounting scandals of Enron, Tyco, and others of 2001 and 2002. Though publicly quoted companies were mostly affected by the Act, its enactment pointed the public attention to nonprofit organizations, particularly church and religious nonprofits whose financial control procedures are universally acknowledged to be suboptimal.;A qualitative single-case study method was used. To that end, a total of 20 individuals (6 for the pilot test and 14 for the main survey), spread across different parishes of the Redeemed Christian church of God, North America in the states of Arizona, Illinois, Texas, Indiana, Minnesota and California, were interviewed via the telephone.;The problem addressed was on perspectives of church leaders and parishioners with regard to potential benefits and problems of extension of Sarbanes-Oxley Act-like financial controls to improve church financial management. Four research questions were established touching on the effect of lack of appropriate legislation and internal controls on resource management and the major challenges against the implementation of the Sarbanes-Oxley Act (2002).;Interview transcripts were coded and analyzed using NVivo for themes relevant to research questions until saturation was reached. Eight major and two minor themes touching on the central issues of internal control and the Sarbanes-Oxley Act were generated from the analysis of the interview transcripts. It was concluded that church staff are receptive to the introduction of better financial control procedures but will need extensive support in implementing effective and transparent financial control procedures. Existing theories of stewardship, transparency, stakeholders, agency and ethics were explored.;This study will enhance the body of knowledge in internal control and assets management in the nonprofit industry in general and churches in particular.;Further research will be required on church doctrines and a multi-case study situation.