Most investors think Sarbanes-Oxley regulations have been the rule of the road in corporate governance since put into law in 2002. That has never quite been true. The law has been challenged in the courts for almost six years, accused of giving the federal government too much power to push public companies around.

What appears to be the final challenge to Sarbanes came to an end as a federal appeals court turned back a legal challenge to the act.

According to The Washington Post, "Businesses have protested that the act imposed costly burdens and provided too little benefit." The cost issue is entirely true, especially for small public companies that have had to stretch financial resources by spending hundreds of thousand of dollars to meet the requirements of the law.

But, it would be hard to make the case that the average shareholder is not better off with more independent corporate audit committees and accounting firms under pressure to perform flawlessly. A look at the number of companies that have had to restate financials because of errors uncovered and enforced by audit committees is a testament to the benefits of the law. The law has ended the habit of giving large institutions a "look" at company prospects and has taken away many of the disadvantages that individual investors have suffered for decades.

Sarbanes has been expensive, but the alternative would have done the common shareholder a great deal of damage.

Douglas A. McIntyre is an editor at 247wallst.com.

A survey discussed on the Sox First blog raises questions about the effect that Sarbanes-Oxley has had on employee morale, five years into its career. It seems that many employees aren't so sure about their bosses' integrity. Here's how they graded them on "organization efforts to encourage integrity":

A – 35 percent

B – 34 percent

C – 18 percent

D – 10 percent

F – 4 percent

So 3/10 employees gave a grade of C or worse. More disturbingly, at public companies, "22 percent said results are rewarded even at the expense of unethical practices." Ethical concerns seemed to be most common at smaller companies, which is interesting.

While there is considerable discussion about the "need" to roll back Sarbox, the continued concern about ethics on the part of employees makes me think we need more work done on compliance, not less.

According to an article in the Financial Times, three-quarters of U.S. chief financial officers believe that Sarbanes-Oxley should be repealed. In other news, Paris Hilton does not believe that driving on a suspended license should be illegal.

But seriously, does the fact that CFOs believe that Sarbox should be repealed mean anything? According to the article, "Last month, Financial Executives International, a grouping of treasurers and chief financial officers, found that costs associated with implementing Section 404 had fallen by 23 percent since 2005. But it also found that 78 percent of executives polled in a survey believed that the costs of Sarbox still outweighed the benefits."

It's hard to quantify the benefits of Sarbanes-Oxley, which makes doing a cost-benefit analysis difficult. It's probably impossible to know how many cases of accounting fraud the bill has prevented -- kind of like trying to figure out how many deaths per year are prevented by laws requiring that guns be kept in locked cabinets when children are around.

Still, the CFOs do have a right to complain: Sarbanes-Oxley was passed mainly to restore investor confidence after the collapses of Enron and Worldcom, among others, and it may be more stringent than necessary. The SEC will enact some reforms to the bill to make it more business-friendly, while still keeping the substance in place to protect investors.

In what must be seen as great news for investors, and perhaps bad news for private equity funds, the costs of complying with Sarbanes-Oxley continue to decline. According to a piece in today's Wall Street Journal, compliance costs fell 23% year over year to an average of just under 3 million dollars per company. but executives are still not happy. Based on a survey of 200 of them, 78% think the costs still outweigh the benefits. Granted, the benefits of Sarbanes-Oxley accrue mainly to the shareholders and only in select cases (Honest companies don't Sarbox to be honest, so it's 3 million dollars down the tubes). The main benefit for the markets has been restoring investor confidence in the wake of Enron, Worldcom, Tyco, etc.

Obviously, this is good for investors: Less money spent on accounting costs means more money for research and development, expansion, marketing, or even dividends. But it's not so great for the private equity funds because of costs of compliance continue to fall, that will equal less cost-cutting opportunities and, because of the effect on earnings, higher share prices for targets.

But the 78% of executives who don't like Sarbox may be ready to jump into the arms of a private equity firm with a fair offer.

Over the years, top private equity firms – such as Blackstone – have said that a big reason for going-private transactions is to escape the clutches of Sarbanes-Oxley (SOX).

SOX was the result of the massive scandals of WorldCom and Enron. And the law is pretty strict. Some of the requirements include: CEO/CFO certification of the financials; major penalties for fraud; higher standards for internal controls; and so on.

But, how bad is SOX really?

Maybe it's overblown. This is the sentiment of a recent study from three academics (Ohio State's Andrew Karolyi and René Stulz, as well as the University of Toronto's Craig Doidge).

If anything, foreign companies are still listing on US markets. What's more, there is certainly a big benefit for the liquidity of the Nasdaq and NYSE Euronext (NYSE: NYX). Actually, the study shows that foreign companies that list on US markets tend get a premium on their valuations, which generally does not happen when they list on foreign exchanges.

But studies like this are ignored. So, don't expect private equity firms to stop talking smack about SOX.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

Herb Greenberg's Weekend Investor column focuses on the need for investors to be more skeptical or, as he calls it, detective-like. By looking deeper into the numbers than just the earnings per share or revenue growth, you can sometimes uncover signs of trouble before most Wall Street analysts do. And with increased disclosures as a result of the Sarbanes-Oxley Act, there may be more red flags to be found than ever.

Unfortunately, I suspect very few investors have the skills to read a 10-K or 10-Q critically. Most of us just take everything at face value. But, learning a little bit of "forensic accounting" is a lot of fun (you really do feel like a detective) and may help you notice some danger signs. Here are my favorite books for digging deeper into financial statements and seeking out signs of fraud or misrepresentation:

Financial Shenanigans: How to Detect Accounting Gimmicks & Fraud in Financial Reports by Howard Schilit. Probably the best book on accounting fraud.

Quality of Earnings by Thorton O'Glove. I found this one dry and boring, but it's written by one of the first experts in the field, and contains some great examples.

The Art of Short Selling by Kathryn F. Staley. While not exclusively about accounting fraud, this contains some interesting stories of companies that were engaging in creative accounting. And, if you become an expert on creative accounting, short-selling may be a way to a profit from it.

BloggingStock.com's Jonathan Berr had a good piece on the implications of Sarbanes-Oxley (SOX). This is a federal law that Congress rushed into effect after the implosions of Enron and WorldCom. Basically, SOX has imposed some tough regulations on public companies in terms of disclosures and internal controls.

However, SOX can be difficult for small companies and some critics think that the U.S. IPO market has, as a result, been stunted. In fact, some U.S. companies are listing their shares in more favorable markets, such as the AIM market in London.

Well, there may be some change. Today, the Nasdaq announced that it has hired former Senator Michael Oxley as its non-executive vice chairman. No doubt, he will be a great advisor, but he may also help the financial industry push for adjustments in SOX.

It's likely to take time, but Nasdaq's move is definitely savvy.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

Those who don't learn from history are doomed to repeat it. Words to live by in life and investing. The problem is that many in corporate America aren't getting the message.

Bitching and moaning about Sarbanes-Oxley is so common place that it barely causes a ripple. Companies despise the law. They always have.If you want to work any CEO or CFO into a rage, just ask them about section 404. Some smart entrepreneur should sell dartboards with pictures of Sarbanes and Oxley. They would be a huge seller with anybody connected with corporate accounting including my wife.

People, including those attending a conference on the law hosted by Treasury Secretary Henry Paulson, should remember why the law was needed.

"We can't forget where we were five years ago," said Ann Yerger, executive director of the Council of Institutional Investors, according to Reuters. "There was a remarkable crisis of confidence ... I fear we're sort of losing touch with that period of time."

Good point.

Remember Enron? Remember WorldCom? Remember the billions of other examples of corporate shenanigans that rocked the market.

Sarbanes Oxley isn't perfect and should be fixed. Warren Buffett argues with some justification that law makes companies jump through lots of unnecessary hoops. The baby shouldn't be thrown out with the bath water. The law has done plenty of good for investors and I hope that's not forgotten by members of Congress eager to do the bidding of Wall Street.

Otherwise, we will go through this whole process all over again.

While the takeover battle between the NASDAQ and the London Stock Exchange rages on, the lesser-known American Stock Exchange (AMEX) has hired Morgan Stanley to begin the process of demutualization, presumably setting the stage for an initial public offering (IPO). The IPO comes after numerous exchanges/trading companies have gone public in recent years including the Chicago Mercantile Exchange, New York Stock Exchange and, regrettably, Refco.

The AMEX is definitely the least-respected of the major exchanges. I once mentioned a company to an older stock broker friend and asked him what he thought of the company. The first thing he said was "Ah! The AMEX! That's where bad stocks go to die." The AMEX will also continue to face competition for listing from the OTC market and even the Pink Sheets, where it is taking steps toward greater transparency and scrutiny of companies, perhaps setting the stage for a better reputation. The Pink Sheets is widely known as a great place to find penny stock pump and dumps.

In addition, the high costs of Sarbanes-Oxley will, in my opinion, lead more companies to seek private funding, leading to fewer IPO's in the future. The AMEX may do great, but it's not an IPO I'll be buying into.

It's been giddy times on Wall Street. Might this be the prelude to a big fall?

That's the take from a recent report from Senator Charles E. Schumer and Mayor Michael R. Bloomberg. The research is based on the work of the management consulting firm McKinsey, which conducted 50 extensive interviews of business leaders.

Basically, unless certain changes are made, NY may lose anywhere from 4% to 7% of its global share of the financial services market within the next five years.

It should be no surprise, since among other problems the US has too much litigation.

What's more, the new regulations of Sarbanes-Oxley (SOX) make it unfavorable for companies to go public in the US. As a result, overseas markets look more attractive.

The good news is that these are things that can be fixed. For example, it looks like the SEC is already making moves to lessen the impact of SOX.

But as usual, such issues are complex and can be crowded out by other political issues -- after all, how many Americans really know what SOX is? So it is likely to take a while for change to take place.

In the meantime, other major overseas financial centers will, of course, not wait.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.