NEW YORK (CNNMoney.com) - Corporate executives, faced with greater regulatory scrutiny and demands in the wake of corporate scandals like Enron, have for some time moaned that new compliance rules are costing them profits and manpower, as well as cumbersome and probably not that effective.

Now a new lawsuit's adding another criticism: They're unconstitutional.

Last month, Washington D.C.-based lobbying group The Free Enterprise Fund joined hands with the small Nevada-based accounting firm Beckstead & Watts to sue the Public Company Accounting Oversight Board (PCAOB) -- the five-member oversight board that was created as part of the Sarbanes-Oxley Act of 2002, which monitors and disciplines accounting firms that audit public companies.

The group contends that the PCAOB has wide government-like powers such as the ability to levy fines, but has little oversight by the government – a violation of the constitution's separation of power clause. In addition, the plaintiffs urge a review of the way in which the board members are appointed.

The lawsuit is the latest challenge to Sarbanes-Oxley, which was created to tighten corporate financial reporting standards as Corporate America reeled from the high-profile bankruptcies of Enron and WorldCom, and legislators and investors cried out for improved corporate compliance to avoid another meltdown on Wall Street.

While Sarbanes-Oxley has had its share of criticism, particularly when it comes to the high cost of compliance, it was more of a muffled murmur of discontent than a full-fledged cry for reform as business attempted to improve its tarnished reputation.

But as the fallout from WorldCom and even Enron becomes a distant memory -- this despite the fact that the long-awaited trial of Enron's founder Kenneth Lay and former CEO Jeffrey Skilling is now underway -- critics of Sarbanes-Oxley are increasingly becoming more vocal, and experts believe the controversial act may be in for makeover.

"Sarbanes-Oxley is a classic example of government overreaction," said Mallory Factor, chairman of the Free Enterprise Fund which recently hired former special prosecutor Kenneth Star as one of its attorneys. "We don't have a problem with transparency but we've created a class of people that are just professional bureaucrats that want a larger bureaucracy that's extraordinarily expensive and cuts down innovation."

A recent study conducted by the Securities Industry Association estimated that the cost of compliance has nearly doubled in the past three years to an estimated annual total of more than $25 billion in 2005, up from $13 billion in 2002.

The SIA study blamed the surging costs on a number of inefficiencies in implementing the law, including duplication of examinations, ambiguity, inconsistencies in rules and regulations and delays in obtaining clear guidance.

The study concluded that while there has been some progress on fixing these inefficiencies, "further improvements are needed."

Factor said costs associated with Sarbanes-Oxley are prohibitively high for small and mid-sized companies that are trying to compete with larger players, creating a barrier of entry for these firms. He added that the law, which was created to monitor the large accounting firms in order to prevent them from signing off on misleading accounting, is actually bolstering their profits to the detriment of small auditing companies that can't afford to pay the fees associated with compliance.

"The costs outweigh the benefits and hurt American business," he said.

Corporate governance experts say that as the emotional reaction towards the slew of corporate scandals is replaced with more rational thought, there's now a movement in the U.S. to revamp corporate compliance and shift the focus from rigid, all-encompassing rules to a change in corporate culture.

"You can fill the Library of Congress with rules and it won't change a thing," said Tamar Frankel, professor of law at Boston University Law School. "People are inventive and Americans, in particular, are entrepreneurial and creative. There's always a way around the rules."

She said Sarbanes-Oxley did some good in providing rigid specificity to accounting rules but its narrow "one-rule-fits-all" makeup doesn't make a dent in improving the underlying culture within Corporate America that promotes profit at all costs.

Dov Seidman, chairman and chief executive of LRN, a provider of corporate ethics and compliance solutions to large corporations, said Corporate America hasn't become complacent about compliance, but is now recognizing that the best way to prevent another Enron is through changing the mindset of corporate executives rather than relying on strict rules to enforce compliance.

"Right now, corporations are complying with rules because they have to," he said. "People are coming to that realization that we have to get away from rules and focus on the culture."

He said the spirit of Sarbanes-Oxley is right in forcing chief executives to take more responsibility for the actions of their companies, but added that he expects the mechanism to evolve.

And experts believe that evolution will largely take into account the high-cost burden of compliance to small-and-mid-sized corporations.

Thomas Lehner, director of policy for Business Roundtable, an association of CEOs from the largest 150 U.S. companies, said lawmakers have less of an appetite to make changes for larger companies that have been able to absorb the costs.

In a survey released Monday, Business Roundtable found that the large corporations have seen stabilization in compliance-related costs, with 94 percent of respondents expecting their costs to either remain the same or decrease in 2006.

He said the larger companies are willing to put up with the costs to maintain a higher level of investor confidence in their numbers. But he said even among the larger corporations, there is a call for "some measure of flexibility" in the law.

"You want to give professionals the ability to use their own judgment," he said. We have to live with rules but you don't want them to be so rigid that they take away from core business functions."

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Enron's collapse sparked the passage of Sarbanes-Oxley. Click here for full coverage on the long-awaited Enron trial.