Washington (April 18, 2002) -- By a margin of 49-12, the House Financial Services Committee has approved legislation designed to improve oversight of the accounting profession and rules governing corporate disclosure.

The bill, drawn up by committee chairman Michael G. Oxley, R-Ohio, essentially gives the Securities and Exchange Commission sweeping authority to establish its previously proposed five-member "Public Accountability Board" to oversee the accounting profession. The board would be comprised primarily of people outside the profession.

The bill also gives the SEC the authority to establish guidelines regarding bans on consulting work for audit clients —such as internal auditing and financial systems design work — but does not ban tax-consulting.

However, Democrats and consumer advocates criticized the bill as diluted and point out that it basically shifts the responsibility for reform to the SEC, whose current chairman Harvey Pitt represented the Big Five and the AICPA while he was in private practice.

--Electronic Accountant Newswire staff

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