Forty percent of respondents do not believe that reforms included in the Sarbanes-Oxley Act are sufficient to enhance corporate accountability, and 56 percent are yet to be convinced that the creation of a Public Accountability Board to oversee the accounting industry will more effectively curb abuses than the current system. Additionally, over half of the respondents believe recent  scandals are representative of a broader crisis of confidence, rather than just a few "bad apples."

The harsher penalties contained in the law, however, are viewed as positive steps to rein in corporate malfeasance, with respondents in agreement that increasing penalties for CEOs and CFOs who make false statements to the SEC or do not certify financial statements will enhance the accuracy of financial reporting. Some 68 percent think the provision that CEOs and CFOs must forfeit profits and bonuses when earnings are restated due to securities fraud will be an effective deterrent.

Results also show support for reforms under consideration by lawmakers and regulators, such as the expensing of stock options and the requirement that the board's audit committee have an accounting or financial management background. The Financial Accounting Standard Board is currently re-evaluating the controversial expensing of stock options rule; meanwhile, a growing list of corporations including General Electric, Coca-Cola and Bank One have announced plans to adopt such accounting.

"A majority of institutional investors favor actions that are not currently required for all public companies," said Gordon McCoun, Senior Managing Director of FD Morgen-Walke." At the same time, many investors noted the U.S. already has the most extensive body of securities regulations in the world, and were skeptical that enacting new regulations will achieve the desired results. These investors are saying, in effect, that integrity and morality cannot be legislated -- but financial manipulation can be deterred if the penalties are severe enough."