The number of material weaknesses large companies are reporting has plunged in the last two years, according to an exclusive Compliance Week analysis—further evidence that Section 404 of Sarbanes-Oxley, as onerous as it is, has compelled a dramatic improvement in companies’ internal control over financial reporting.

Jaclyn Jaeger is a freelance contributor to Compliance Week after working for the company for 15 years. She writes on a wide variety of topics, including ethics and compliance, risk management, legal,...