The Sarbanes-Oxley law (passed in the wake of accounting scandals at Enron, Tyco, and Worldcom) was meant to restore investor trust, in part by making auditors corporate watchdogs once again. But, now, its role has come into question. Today, Treasury Secretary Henry Paulson and Securities and Exchange Commissioner Christopher Cox gathered a team of business all-stars in Washington to discuss the competitiveness of U.S. financial markets, and "SarbOx" was one of the major topics of discussion.

Before the Sarbanes-Oxley reform, audit firms had become consulting firms. They sold services to audit clients, and the two developed rather cozy relationships. The law was designed to realign those relationships -- to take the "cozy" out, you might say.

But, business leaders believe Sarbanes-Oxley has swung the pendulum too far the other way. Warren Buffett says the board of Berkshire Hathaway now spends a lot of time and money ($24 million last year) fullfilling SarbOx requirements -- time and money that could be spent on more productive endeavors. Former Treasury Secretary Robert Rubin says he would be “scared to death” as a CEO to sign off on a company’s financials, if he couldn't count on the auditor's report.

On the other hand, investor advocates say Sarbanes-Oxley has helped companies make great strides to restore investor confidence. The director of the Council of Institutional Investors, Ann Yerger, says she’s skeptical of the argument that regulations have gone too far. She believes most of what SarbOx did was to force companies to establish “best practices” that they already endorsed.

What do you think? Are businesses facing too much regulation? Or, do investors need these type of protections to ensure that company’s report honest financial numbers?