The five members of the Securities and Exchange Commission voted to prohibit the two most senior accounting partners on a team auditing a company, and other partners deemed significant to the team, from working on that company's books for more than five or seven years.

A proposal that the SEC had issued for public review in November had extended the requirement for job rotation to all partners on a team.

The new rule and others governing accounting firms and auditors "will go a long way" toward preventing accountants from becoming too cozy with their corporate clients, SEC Commissioner Paul Atkins said before the vote.

SEC officials say the new rule goes beyond what was mandated by Congress -- rotation only of the top two partners -- in a sweeping law enacted last summer to deal with a wave of corporate accounting scandals. The public comment period brought objections from both the accounting industry and corporations.

They expressed concern about a potential "loss of expertise" among auditors working on a company's account, said Commissioner Cynthia Glassman.

If the requirements prove not to go far enough, she said, the SEC or the new board overseeing the accounting industry created by the accountability law will impose additional safeguards.

The new rule also adds a requirement that the two most senior audit partners stay away from a company account for five years, and other key partners for two years, in addition to the five- or seven-year limit on working on it.

The SEC put off for a day, until Thursday, the commissioners' vote on another controversial proposal under the law: A requirement that company lawyers resign and inform the agency should they suspect fraud by a client and cannot get company officials to stop it.

At least two of the five commissioners now see problems with the proposed rule as written, a government source said Tuesday on condition of anonymity, confirming a report in The Wall Street Journal.

The rule grew out of a requirement proposed by Sen. John Edwards, D-N.C., a former trial lawyer who is a candidate for the Democratic presidential nomination next year.

Barbara Roper, director of investor protection for the Consumer Federation of America, said if the agency had kept the broader ban on auditors continuing to do work for a company, "it would have made this a fairly significant reform."

Even the all-partner ban was less stringent than a requirement to change entire accounting firms rather than individual auditors on company accounts, which was advocated by several congressional Democrats during debate on the bill. Changing audit partners came as a compromise.

Other advocates for tough changes in laws to crack down on corporate fraud, including teachers' pension fund chief John Biggs, also had pushed for mandatory rotation of accounting firms.

The new SEC rules also would prohibit a range of consulting and other nonauditing services -- often very lucrative -- that accounting firms may provide their audit clients, including information technology, bookkeeping, financial systems design and personnel and legal services.

Auditor independence was among issues at the heart of the Enron affair, which raised questions about accounting firm Arthur Andersen LLP having done both auditing and consulting work for the collapsed energy-trading company. The former accounting giant received tens of millions of dollars annually for both.

Andersen was convicted last June of obstruction of justice for destroying thousands of audit documents.

Some Democratic critics have complained that with outgoing SEC Chairman Harvey Pitt still in place until his successor is confirmed by the Senate, the agency may be watering down the corporate accountability law. Pitt resigned in early November after a series of political missteps that embarrassed the Bush White House.

President Bush has yet to send to the Senate the nomination he announced in mid-December of investment banker William Donaldson, a Bush family friend with experience on Wall Street and in government. His confirmation appears assured, but the delay has irritated some Democratic critics.

-- Marcy Gordon, AP Business Writer

See also: SEC to Vote on Mutual Funds Vote Lists