The Compliance Week study looks at "material weaknesses" in financial reporting that companies must disclose in their annual reports and examines such disclosures at 426 of the S&P 500 companies. A total of 14 weaknesses were reported by 11 companies.

By comparison, when Compliance Week examined material weaknesses at more than 400 randomly selected large companies in 2006, almost every single company reported at least one material weakness, and the group as a whole reported more than 800.

This year's results show the gains made since Sarbanes-Oxley went into effect in 2004, said Matt Kelly, editor-in-chief of Compliance Week.

"After four years of hard learning and experience, we're seeing proof that Sarbanes-Oxley does deliver benefits," said Kelly. "This is Corporate America's equivalent of going to the gym: a painful experience at first, but eventually that pain fades and your health improves enormously over the long haul."

Kelly noted that the fact that there were fewer reported weaknesses fits with other evidence suggesting SOX is achieving its aims. Restatements of financial results, which soared shortly after SOX was passed, dropped in 2007 for the first time in five years. And last month, another Compliance Week analysis of audit fees at large companies showed a record-low increase of only 3.2 percent last year.

"This is all pointing to the same pattern," he said. "Companies took a hard look at their accounting systems immediately after SOX was passed, found all sorts of nasty problems, and spent a lot of money to fix them. Now we're seeing fewer mistakes and less effort to comply with SOX because the systems to report financial results are working well."

Another notable shift from two years ago: At that time, the same material weaknesses were disclosed by many companies, as they all struggled with the same basic issues. Now far fewer companies are disclosing material weaknesses, but the ones that do disclose weaknesses seem to have multiple woes.

Pall Corp., for example, which confessed to material weaknesses in its tax accounting for last year, also announced in 2007 that it would restate several years' worth of financial results. Other companies disclosing material weaknesses last year--General Motors, American International Group and Verisign, for example--have all recently endured restatements, management shakeups, or similar governance troubles.

"We're seeing a shift in what having a material weakness means," said Kelly. "Four years ago, it simply meant that you hadn't been diligent in your financial reporting--and that included a lot of companies. Today a material weakness is really a black eye, and correlates to having other governance problems investors and regulators would want you to resolve."