The Sarbonnes-Oxley rules were passed after the Enron scandal to make sure that companies were reporting the true status of their finances. The SOX rules were one-size-fits-all which hurt the smaller 80% of the approximately 10,000 companines listed on stock exchanges in the US. Eg, the smaller companies had to spend alot more of their resources in order to get a "clean audit" compared to larger companies. This created an undue burden on the engine of US economic growth, so, the SEC has now re-evaluated the policy, and is, wisely, making the smaller company internal controls risk- and materiality-based instead of cookie-cutter.
Of course, what happened in Enron is that the company found loopholes to the overly prescriptive accounting rules so much of what they did was legal. The overly prescriptive accounting rules removed professional judgement from the finance and auditing industries so it set-up a moral hazard where you tried shenanagins within the system to try to beat the system. Eg play by the letters but not the spirit of the law (eg the common response to most bad laws).
Yes of couse in the corporate scandals of the late 1990s early 2000s alot of laws were broken, and alot of people are being sent to jail. Fraud is indeed prosecutable and a good use of oversight resources.
There is a quote from a labor union leader in today's NY Times article about the lessening of restrictions on smaller businesses, "First, no one should be able to sell securities that do not have adequate internal controls, and second, whether the system of oversight over the auditing industry was going to work. It feels today as though we may be getting both of these things right."
See the thing is overly tight and senselss accounting rules mean that capital resources are restricted in their movement. This chases funds overseas and into private, not widely-held, hands. This is good for no-one. Prosecute those that break the law, and let the professionals do their business. Put them in jail if they cheat and remove the regulatory cat-and-mouse game playing which is a waste to everyone. The private sector hires the best, the government the rest. There is no way that government can keep up with the markets. To pretend differently is a set-up (again) for failure.