The real issue, the Wyoming Republican said, is that the mathematical models recommended by the Financial Accounting Standards Board to value options are in adequate.

"FASB is right to slow down its stock-option proposal," the sponsor of an anti-expensing bill in the Senate said in a statement. "But a delay should occur because FASB is working to test the accuracy of the evaluation formulas, not because it wants to give companies more time to prepare for implementing a flawed proposal."

FASB, which sets standards in the U.S. for financial reporting and accounting, said earlier this week that its proposed expensing rule would take effect on June 15, 2005, instead of Dec. 15, as originally planned.

FASB chairman Robert Herz said the delay is to give companies still wrestling with complying with the Sarbanes-Oxley Act more time to prepare for a new accounting standard. "We have clearly heard from preparers, auditors and the SEC staff that the first quarter of 2005 is crunch time," he said during a FASB meeting Wednesday.

Herz added that the six-month delay in implementing the options proposal is aimed at reconciling private-sector concerns about complying with the expensing mandate and those of investors calling for greater corporate transparency.

A major issue in the debate over the board's plan is whether the methods used to measure the cost of options are accurate. In its proposal FASB advises companies to employ the commonly used Black Scholes method or the "binomial tree" model. The board said this week that these valuation systems are proven and that no further testing is necessary.

Not so, Enzi said. "The underlying problem remains that FASB is not field-testing evaluation models," he said. "The proposal ignores widespread valuation concerns and could create significant liability concerns if the wrong valuation model is chosen by a company."

FASB rejected a valuation method recently proposed by Cisco Systems Inc., Genentech Inc. and Qualcomm Inc., which argued that their system, known as the "fair value index-adjusted" model, is more accurate and easier to implement than other commonly used techniques. It also would take a much smaller bite out of a company's profits, the central concern with expensing options.

This impact on corporate earnings is of particular concern in the technology industry, where many companies offer stock options. Options-expensing foes argue the practice would lower companies' reported earnings and hurt their stock price. They also claim it would become too expensive to continue to issue options. That expense, and failure to offer options as an incentive, would force more companies to hire outside the U.S.

"The development of entrepreneurial companies and the small business community should not have to absorb the shock of a proposal that has not been thoroughly tested and could cause irreversible harm," Enzi said.