In light of the mess surrounding subprime mortgages, even those who once called Sarbanes-Oxley section 404 burdensome and costly are beginning to see the benefit of internal financial controls. A Reuters piece published at Baseline reports:

[N]ow that investor confidence has again been shaken by market turmoil, calls to ease Sarbanes-Oxley have quieted as the regulatory pendulum swings again to reform...."An increasing appreciation for the internal controls is emerging," Jim Turley, chief executive of accounting firm Ernst & Young.

Though Sarbanes-Oxley disclosure provisions should have made executives more aware of the dangers of subprime lending, experts say, the fact that they didn't doesn't mean Sarbanes-Oxley failed. It means that companies did not follow the law as intended.

According to the story, UCLA law professor Stephen Bainbridge says chances are slim now that small businesses will receive further relief from Sarbox or that Sarbanes-Oxley requirements will be eased. He noted "...the mood on Capitol Hill in light of the subprime mortgage crisis is not going to be very deregulatory."

In short, the subprime crisis most likely means more regulation will be on the way -- much to the chagrin of free market champions.