American Business: A Few Bad Apples

This paragraph sums up an editorial in today's Washington Post:

There is a danger in this verdict [i.e. conviction of Lay and Skilling], however. In the wake of Enron's bankruptcy, some argued that the problems of corporate America were the work of a few bad apples. That argument lost, for the good reason that fully 250 U.S. public companies had to restate their accounts in 2002, up from 92 five years earlier. Corporate America's problems reflected lax oversight of auditors, conflicts of interest at audit companies, accounting rules with too many inviting loopholes and so on. The Sarbanes-Oxley Act, passed in 2002 to fix these systemic weaknesses, now faces a backlash from firms that complain of stiff compliance costs. Although some tweaks in the way the law is implemented may be justified, the welcome Enron verdict should not color the regulatory question. This decade's business scandals were not just about bad apples, and putting those apples in jail is not going to change that.