The Corporate and Auditing Accountability, Responsibility, and Transparency Act of 2002, backed by Republicans, passed 334-90. Rep. Michael G. Oxley (R-Ohio) and GOP Rep. Richard Baker (La.) authored the bill.

The measure would bar auditors from performing internal auditors or designing financial systems for audit clients, create a new, five-member regulatory board made up mostly of non-accountants, and empower the Securities and Exchange Commission to determine the duties and authority of the board. Additionally, there is an anti-shredding clause that would require auditing papers be kept for seven years.

Critics argue the measure fails to address many proposals made by lawmakers and industry leaders and that the accounting industry will simply take control of the new oversight board.

The Democratic House bill, opposed in a 219-202 vote, would have given the SEC the power to strip executives of stock bonuses if party to falsified financial statements, and would have required companies to change accounting firms every few years.

Have an opinion on this topic? To add your voice to Letters to the Editor, write editor@smartpros.com. All letters become the property of SmartPros and may be edited for space, clarity, relevance and fairness upon publication.