Sarbanes-Oxley has turned into a tightrope performance. But that's what comes when you are trying to serve two masters: investor confidence and public companies.

The latest developments suggest SOX is a work in progress, and there are more changes ahead. Last week, Thomson Financial figures showed that more non-US companies were now choosing to list on the London Stock Exchange instead of New York.

Why London, instead of the biggest capital market in the world? Critics blame it on Sarbanes-Oxley.

Then a Securities and Exchange Commission advisory committee recommended exempting 80 per cent of public companies from internal controls over financial reporting.

The panel came up with a Plan B, in case it didn't get past the SEC mandarins. At 18-1, the decision to recommend the change was overwhelming but not unanimous. The dissenting voice came from Kurt Schacht, the executive director of the CFA Centre for Financial market Integrity who told the New York Times: "It is clear that we need to do something for small companies, but giving them a pass on any verification and oversight of internal controls will come back to haunt us."

Will he be right? It's a tough call but the problem was inevitable from the start when regulators put in place a law that served two masters. How do you encourage entepreneurialism and protect the public at the same time? As Hartley Bernstein points out in AXcessnews.com, that's the dilemma now facing the SEC. Both are important. You can't water down one to make way for other.

"It is one thing to say that smaller companies are inherently more risky. It is quite another to assume that investors who are willing to assume those market risks also are prepared to suffer the consequences of corporate fraud or management misconduct. Corporate fraud is not a risk that any investor would assume willingly, or should be expected to tolerate in the interest of "capital formation."

Corporate fraud and stock manipulation are not "risks," they are crimes. Regulators need to recognize that fact at the same time as they are responding to the burden that disclosure and controls place upon smaller companies. There must be room under Sarbanes Oxley to accommodate both the financial concerns of smaller public companies and the need to protect investors against misconduct. It is not acceptable to sacrifice the latter for the benefit of the former."