In recent months the SEC and the independent board that supervises the accounting industry have taken differing approaches toward the key part of the Sarbanes-Oxley law that arose from the 2002 corporate scandals: the requirement for companies to assess the strength of their internal financial controls and to fix any problems.

SEC Chairman Christopher Cox urged, in a letter to the Public Company Accounting Oversight Board last fall, that it revise its rules for outside accountants under the requirement to adapt them to the size of the company whose books are being audited.

Now the SEC staff has advised the accounting board - which is overseen by the SEC yet is an independent body - to make several key revisions to its proposed rules for auditors in a way that some experts say would weaken them. Cox and the other four SEC commissioners are having a public meeting Wednesday to discuss the board's proposed rules for auditors and the "remaining issues in aligning" the SEC and accounting board proposals.

"This is an effort to make sure that investors never learn about material weaknesses" in companies' financial controls, said Lynn Turner, a former chief accountant at the SEC.

SEC spokesman John Nester and Colleen Brennan, a spokeswoman for the accounting board, declined to comment Monday.

The two bodies "have been working together" to improve internal-controls rules under the 2002 law "to establish a risk-based, top-down approach that is scalable for companies of all sizes," Cox said in a statement last week. That would allow companies and auditors to focus on the parts of businesses that present the biggest potential financial risk - an approach that the SEC says benefits investors.

SEC officials note that the two bodies declared last year on several occasions that they shared the goal of writing rules that balance the need to protect investors with the goal of reducing unnecessary cost and duplication.

Changes the SEC wants the accounting board to make include tailoring the scope of a company's audit based on its size alone, rather than both its size and complexity, allowing greater leeway in deciding how much to test internal controls, and requiring outside auditors to use work previously done by others in their reviews, according to several individuals familiar with the matter. They spoke on condition of anonymity because the SEC request to the accounting board has not been made public.

What may have appeared as an innocuous effort to put regulatory flesh on the bones of the Sarbanes-Oxley law has spawned accusations of an SEC power grab and a move to weaken auditing rules - and thereby investor protection.

Barbara Roper, director of investor protection at Consumer Federation of America, said the SEC move was a way of gutting Sarbanes-Oxley's internal-controls requirement, called Section 404, "without openly repealing it."

"This is just the SEC pandering to business interests by rolling back a regulation that has proven to be effective," Roper said.

In a similar vein, the revelation last week of a new agreement clarifying the SEC's influence over the appointment of members to the U.S. accounting standards setter, the Financial Accounting Standards Board, raised concern that it could erode the board's independence. The SEC insisted that the new accord simply formalized practices that were required under the Sarbanes-Oxley law and will not expand the SEC's authority over the board.

The head of a policy group backed by the biggest accounting firms did not criticize the SEC's actions but stressed the importance of strong rules for companies and their auditors.

"Whatever the SEC and the PCAOB do, it's important that the investor protections" of the 2002 law be preserved, said Cynthia Fornelli, executive director of the Center for Audit Quality.

The accounting board's proposal as written "honored those protections in the letter and spirit," said Fornelli, who was deputy director of the SEC division that regulates the mutual fund industry from 1998-2004.

The developments come at a time when business interests are pushing for an easing of corporate governance rules under Sarbanes-Oxley as well as restraints on class-action lawsuits against corporations and auditors, and on criminal prosecution of companies by the government. They contend that laws and rules that came in response to the wave of corporate scandals nearly five years ago - Enron Corp., WorldCom Inc. and the rest - are onerous and costly and hurt the competitiveness of U.S. financial markets.

Some critics and investor advocates see the SEC's recent moves, combined with a series of other steps, as evidence that Cox - a longtime free-market Republican congressman who surprised many in the first year of his tenure with a fairly activist, investor-friendly stance - is tilting the agency toward business and Wall Street and away from investors.

Cox disputes that, saying that his commitment to investor protection has not wavered.

As recent developments in that regard, critics cite:

-The SEC's last-minute change in December to its new rules on companies' disclosure of stock option awards to their executives in summary tables provided annually. Instead of the full amount of an option award having to be listed for the year, companies can list a smaller amount for the first year, spreading the remainder over later years as the executive becomes eligible to exercise the options. The options' full value will still be included in the text of annual filings, but not in the new summary compensation tables.

-The SEC's decision to intervene on the side of the Bush administration and corporations - against public pension funds, investor advocates and 32 states and territories - in a case before the Supreme Court that could make it harder for shareholders to get lawsuits against companies for alleged fraud put before juries.

-SEC officials having begun to consider ways to limit accounting firms' legal liability in suits by shareholders and companies.