The House Financial Services Committee voted 49 to 12 to adopt a bill proposed by Reps. Michael G. Oxley (R-Ohio), chairman of the committee, and Richard H. Baker (R-La.) that makes changes the accounting industry was resigned to accept, including a new restriction on two services auditors can provide to their clients: internal audit and financial systems design.

The accounting industry agreed voluntarily to stop providing those consulting services after Enron's collapse last year raised concerns about the role Big Five firm Arthur Andersen LLP played in helping to create and approve the partnerships Enron used to hide massive amounts of debt.

The Oxley-Baker bill passed out of the committee after 11 hours of debate that spanned two days. It would empower the SEC to determine the exact duties and powers of the new five-member oversight board. The board would consist of two members who had never been accountants and three members who had not worked as practicing accountants for at least two years.

The new oversight board would replace a largely self-regulating system for the accounting profession.

"We are plowing new ground," said Baker, chairman of the subcommittee on capital markets. "We are entering into a new arena to give authority to a regulator that did not exist."

The bill is the first Enron-related reform dealing with accountant behavior to be voted out of a congressional committee.

Michael Weiser, a spokesman for the American Institute of Certified Public Accountants, the industry's trade group, lauded the bill's provisions as "unprecedented and rigorous reforms in the discipline of the accounting profession."

But a Consumers Union spokesman said the bill fell short "of making real changes in the way the accounting industry does business."

"It could wind up being a big victory for the special interests that are trying to keep Congress from cleaning up the system following Enron," said Frank Torres, legislative director for Consumers Union.

Although more than a dozen Democratic committee members ultimately voted for the bill, an array of amendments offered by Democrats yesterday and last Thursday were voted down along party lines, highlighting the parties' different approaches in response to Enron.

In fact, the Democrats failed to get any substantial changes made to the bill. They proposed provisions that would have required companies to rotate their outside auditors every four years and give audit committees the power over management to hire and fire auditors.

"Our committee has passed up the opportunity to make adequate changes," said Rep. John J. LaFalce (D-N.Y.), the committee's top Democrat.

The committee let stand a Republican-backed amendment adopted last week that would allow the SEC to ban corporate officers and directors from serving in similar positions in other companies if they are found guilty of wrongdoing. The amendment requires the SEC to use a set of standards adopted by the courts when deciding whether to impose the ban.

LaFalce unsuccessfully tried to get the committee yesterday to reconsider the amendment.

Oxley spokeswoman Peggy Peterson said the committee consulted with the White House and the Treasury Department about the directors' and officers' proposal.

The Oxley-Baker bill is headed next to the House floor for a vote. Republican and Democratic aides to the committee said that could happen as soon as next week.

-- Jackie Spinner