[karl_gluck]

The argument is actually fairly simple: behaviors that have been known to cause fraudulent or deceptive activity in the past are placed under more scrutiny or outright banned.

For example, it becomes quite easy to hide fraud when a single entity is both an investment bank and a mortgage lender.

In my layman's opinion, a lot of the problem comes from the fact that accounting is not an exact science. For a large company with many revenue, expenditure and investment streams spread over the course of a year, accountants have a lot of leeway to massage the numbers as they see fit. Until the house of cards comes crashing down ala 2008 it can be very hard to pick apart what is actually going on from the outside.