WASHINGTON (Reuters) - The Sarbanes-Oxley corporate reform law passed after the collapse of Enron Corp has been called every nasty name in Big Business's book: costly, burdensome, a bane to U.S. capital markets.

But now 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.

Even at the U.S. Chamber of Commerce's annual conference on capital markets this week, there was a marked shift in tone from last year, when Sarbanes-Oxley was blamed for making U.S. markets less attractive to overseas investors.

"An increasing appreciation for the internal controls is emerging," Jim Turley, chief executive of accounting firm Ernst & Young ERNY.UL, said at the Chamber conference, where many of the pro-business speakers said there may be a need for more regulation.

"There's a global debate about what management should be saying about its controls."

The 2002 Sarbanes-Oxley law -- particularly its Section 404 -- was designed to beef up companies' internal controls over financial reporting and to make sure top executives are in the know on financial data. It also requires auditors to report on management's assessment and on the controls themselves.

In fact, the Sarbanes-Oxley disclosure requirements should have helped clarify one of the fundamental questions in the credit market meltdown: When did executives know the value of subprime mortgage-backed securities were actually much lower than what appeared on their companies' books?

"Many of these companies knew or should have known that housing prices don't just go up and up and up forever," said Larry Rittenberg, an accounting professor at the University of Wisconsin-Madison. "The companies did not have any financial controls in place to systematically test the values of these securities."

The lack of controls to test the values of subprime-linked securities was not a failure of Sarbanes-Oxley, he said, but a failure of companies to follow the spirit of the law.

While experts say it's tough to quantify the benefits of Sarbanes-Oxley in the current subprime mess, there's little doubt the market turmoil will lead to more regulation.

"There had been some ongoing talk that small companies may be exempted entirely from (Section) 404," said UCLA law professor Stephen Bainbridge. "Unfortunately, the mood on Capitol Hill in light of the subprime mortgage crisis is not going to be very deregulatory."

Senators John Kerry, a Democrat from Massachusetts, and Olympia Snowe, a Republican from Maine, have sought for some time to ease Section 404 requirements for small companies. They did not respond to requests for comment.