In a speech to the Securities Regulation Institute, SEC chief Harvey Pitt said sweeping fixes are needed to accounting and financial statements -- as well as to the role of outside auditors and audit committees. And countering criticism that a new private-sector accounting watchdog group would not be strict enough, Pitt emphasized that the SEC wants the group to be controlled and funded by the private sector, not by accountants. Meanwhile, Pitt said that the SEC would not object if Congress decided legislation is needed.

Pitt said the accounting profession has not been able to successfully monitor itself. ''We are suggesting, without always being clearly heard, regulation (should be done) by the private sector and not by the profession,'' he said.

He also shot down suggestions from some in Congress that the government should take over the auditing process. ''People who are unhappy with audits today will be downright despondent if the government were to undertake the job,'' he said.

Other details revealed Wednesday about the SEC's plans:

* The SEC's proposed oversight group, dubbed the Public Accountability Board, would be controlled by people with no ties to accounting firms and would not be funded by the accounting industry.

Pitt said he has asked members of the accounting industry's current oversight board, the Public Oversight Board, to reconsider their surprise decision Tuesday to resign and disband the group by March 31, because he doubts the new oversight board can be in place by then. The SEC will ''not allow any gaps to arise in investor protection,'' Pitt said.

The new oversight body would be paid for by companies and the stock markets, thereby eliminating ''one problem inherent'' in that the current oversight board is funded by the profession, Pitt said.

* Companies that spot ''unquestionably significant'' changes to their health would be required to disclose them when they arise -- not at the end of the quarter.

Meanwhile, Robert Herdman, the SEC's chief accountant, said the SEC plans to consider by June rules that force companies to better spell out their use of the types of accounting practices that led to Enron's collapse.