These effects are negative for long-term incentives but positive or insignificant for short-term incentives for both CEOs and CFOs, who have the primary responsibility for the financial reporting process. Compensation sensitivity is also more strongly related to more severe company-level than account-specific control weaknesses. This company-level weakness relation is stronger for the CFO, who has the primary responsibilityfor the processes generating financial information and for thefinancial reporting by the firm. Our findings indicate that SOX disclosures harness the power of compensation schemes to improve internal control quality.