When your name is on the legislation behind those lightening-rod regulations, it lends some weight to your views.

So when Sen. Paul Sarbanes, D-Md., spoke Thursday in defense of the much-heralded and much-maligned Sarbanes-Oxley Act that seeks to reform accounting and auditing and make the scandal-plagued 1990s less likely to recur, he reached for some recent history.

"The legislation came in direct response to a crisis whose dimensions it is all too easy, in retrospect, to play down," Sen. Sarbanes, who won't stand for re-election later this year, told the Consumer Federation of America. Those who now complain that Congress "overreacted" or "overreached" by passing the Sarbanes-Oxley law in 2002 should remember that by 2001, "the escalating number of corporate scandals caused a grave crisis in investor confidence."

He also said the other common broadside against the bill, that it was drafted and approved "in haste," insulted the Congress, which approved the law by impressive margins.

He cited studies that conclude the reform law, and the Securities and Exchange Commission rules approved in subsequent years to implement it, have indeed improved corporate governance and the integrity of accounting.

This month, a Business Roundtable survey found progress in board of director independence, shareholder communications and other governance measures.

It's important to remember rules and structures won't stop all corporate wrongdoing and shouldn't be held to such a measure.

SEC Chairman Christopher Cox repeated in a speech earlier this week the universally accepted notion that there always will be miscreants, adding, "It's important to recognize that such people (lawbreakers) have a corrosive impact far beyond their numbers. Every time one of these scandals comes to light, the public's confidence in our entire system of free enterprise is shaken to its foundation."

Still, Cox said in the text of his speech to the Committee for Economic Development that companies are working to make Sarbanes-Oxley mandates a routine part of their world. "There is now a powerful rededication to ethical governance under way in boardrooms across America," he said.

Though some find much of the broad Sarbanes-Oxley Act wanting, Sen. Sarbanes correctly noted "much of the criticism of the statute has been directed to the two short paragraphs that constitute Section 404." It requires every public company to have a system of internal controls attested to by outside auditors.

Section 404 has provoked a firestorm of criticism that it constitutes regulation gone wild, with costs that are simply untenable for smaller public companies. Some companies have gone private, partly to avoid the burden, and an advisory committee appointed by the SEC recommended a full 80 percent of public companies be exempted from the full rule.

Such a revision would simply be unfair to investors who have a right to know every company they might invest in has met the provisions of standing law.

Sen. Sarbanes on Thursday implied he thought it was illegal to follow the advisory committee's idea, citing the view of Professor James Cox of Duke University and other law professors, who said Sarbanes-Oxley doesn't "authorize the SEC to grant exemptions from its provisions."

The senator favors the view, which deserves to become the consensus position at the watchdog SEC, that smaller companies might need some relief from Section 404 but not a free pass.

"There is no question that costs are involved, particularly if the existing system of internal controls is wanting," Sen. Sarbanes said. "There is also general agreement on the need to focus on the small companies."

Summing up, the senator said, "This is the time to move forward, not backward ... Problems can be resolved without undermining the framework."

-- Neal Lipschutz is vice president and managing editor of Dow Jones Newswires.