A test of internal controls has nothing to do with a company's solvency. A company can be hemorrhaging cash and have excellent controls in place to protect from theft of money and information.

The argument is that the law of diminishing returns applies to government regulation and you can reach a point of over-regulation. Since law is not a monolith we have passed that point in some areas and clearly haven't in others.

There are still people who believe that government cannot solve every problem, and, to stay on topic, the current financial crisis happened with SOX in place. The real problem is that government requires businesses to invest in unprofitable markets and then deregulates when the businesses complain about being over regulated. They create a company (Fannie Mae) then allow said company's leadership to contribute to its regulators in Congress. After 20 years of new laws, unwillingness to repeal older laws, and turning a blind eye, the system is left to teeter until it does the inevitable.