as mentioned before ... GAO apparently didn't believe auditors or SEC was doing anything, even in the wake of SOX
http://www.gao.gov/new.items/d061053r.pdf
http://www.gao.gov/special.pubs/gao-06-1079sp

shows uptick in public company financial filings that had serious audit errors and/or were fraudulent ... even after SOX. choose: 1) SOX had no effect on fraudulent filings, 2) SOX encouraged fraudulent filings, 3) if it weren't for SOX, all filings would be fraudulent.

...

For Hugh McLernon, boss of litigation funder IMF, this is the true contagion. He argues that during the global financial crisis, governments worldwide (with the obvious exception of Australia) began eroding financial laws in relation to the requirement that companies mark their assets to market. Those governments didn't change the laws - they ignored them because to enforce them would have sent many companies into oblivion. "Ignoring one law leads inexorably to the ignoring of others. If the regulators turn a blind eye to the breach of one law, how can they then justify the enforcement of other, closely related, laws?" he asks.

Contempt for the law or its non-enforcement begets fear of the law. In this regard, witness the fallout from the failure of MF Global after that company ignored the requirement to keep its money segregated from that of its clients. In the absence of swift regulatory intervention, the law falls further into disrepute.

...

On a related note, there's this: http://www.bloomberg.com/news/2011-11-25/mf-s-lost-cash-makes-you-wonder-about-goldman-commentary-by-jonathan-weil.html