Last Wednesday, the House overwhelmingly approved H.R. 3763, which was ostensibly drafted to strengthen accounting oversight and toughen corporate disclosure rules.

By a margin of 334-90, Congress basically said to the investing public “Here’s our answer to help prevent future Enron/Andersen disasters.”

That’s a good thing right?

Well, maybe. It’s a step in the right direction, but its shoelaces are untied.

For one, the “Corporate and Auditing Accountability Responsibility and Transparency Act of 2002” would establish a new regulatory body to oversee the profession and discipline auditors. That’s at least a rung above the self-policing framework the profession has adhered to for more than 100 years. And, you can see where that got them.

Upon passage of the measure, the American Institute of CPAs released a statement that basically hailed the profession’s history of self-regulation, but admitted that special times call for special measures. That’s a euphemism for admitting the profession’s current system of self-regulation was for the most part as effective as placing “no smoking” signs in high school lavatories.

For another, H.R. 3763 nebulously spells out the duties and regulatory responsibilities of the new body, not to mention lacking specific guidelines for the composition of its members. In that regard, one runs the risk of having the board populated by members of the profession, which would put the industry back to square one.

On a more positive note, it prohibits accounting firms from providing select types of consulting services to audit clients. It also stipulates that audit papers must be kept for a period of seven years. And it bars executives of companies from trading in company stock, during the so-called “blackout” periods that prohibit the rank and file employees from selling stock from their retirement accounts.

Not surprisingly, the reform measure has come under fire from leading House Democrats, notably House Minority leader Richard Gephardt, who accused the Republican leadership of “selling out to special interests.”

Given that Gephardt has historically been given to overzealous hyperbole over a bag of popcorn offered from the other side of the aisle, I wouldn’t go quite that far, but it would be safe to say that H.R. 3763 definitely needs to be tweaked a mite.

Interestingly, a Democratic alternative bill introduced by Rep. John LaFalce of New York was narrowly defeated 219-202, but in reality offered stronger “teeth.”

It would have required companies to personally certify the accuracy of corporate financial statements and would have given the Securities and Exchange Commission the authority to relieve executives of stock bonuses if they falsify statements.

Not that LaFalce’s bill didn’t have stumbling blocks either, such as mandating that companies change auditors every few years — a pure knee-jerk reaction by someone unfamiliar with the machinations of the profession, since most failures occur during the first two years of an audit.

Now that the House has spoken, the profession awaits reform legislation from the Senate.

About the only thing that’s certain at this point, is that unlike Richard Nixon, we’ll have accounting reform to kick around for at least a while longer.

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