The general economic effects of increased disclosure have been well-documented, particularly as far as capital markets are concerned. But these latest findings "present empirical evidence to support the fundamental link between disclosure and information asymmetry reduction, albeit in a different institutional setting, that of the executive labor market," says Wang.

"The mandatory internal control disclosures under SOX are a credible mechanism that effectively distinguishes good CFOs from bad ones by revealing the firm's internal control quality," the professor observes.