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SEC set to unveil new accounting oversight board

A new framework to oversee corporate bean counters will be unveiled later on Thursday by US securities regulators as they respond to problems that led to the collapse of Enron Corp as well as shortcomings by the energy giant's auditor Arthur Andersen.

US Securities and Exchange Commission Chairman Harvey Pitt, who once represented the big five US accounting firms as a private lawyer, has scheduled a news conference where he is expected to outline broad concepts to get the ball rolling.

Pitt is expected to sketch outlines for a professional oversight panel that would include accountants and non-accountants, among other proposals, though his spokeswoman said he would only lay out "broad concepts."

Yet, the accounting profession already has an oversight panel -- the Public Oversight Board, an affiliate of the American Institute of Certified Public Accountants.

"The contemplation is that the panel would include non-accounting personnel and the SEC would continue to enforce securities laws," SEC spokeswoman Christi Harlan told Reuters on Wednesday. "But the panel itself could look at ethical and competence issues that aren't necessarily part of securities laws."

Andersen has become embroiled in controversy over its role as auditor for the now bankrupt energy trading concern Enron. The accountant has admitted to mistakes, including shredding thousands of documents relating to its review of Enron's books.

At the heart of Enron's troubles were numerous outside partnerships, set up to keep debt off its books, which were reviewed by Andersen.

Those events have kicked off a flurry of probes, including a criminal investigation by the US Justice Department of Enron. The SEC and the Labor Department as well as six congressional committees are also investigating the company's collapse.

Earlier this week, Andersen took its first steps to assign public blame for the Enron debacle by firing the partner who headed the audit of the energy company's books, David Duncan.

Andersen alleged Duncan destroyed documents sought by federal agents probing the collapse of Enron and the related audits. Through his lawyers, Duncan has denied doing anything wrong and on Wednesday he was grilled by congressional investigators for hours.

Sherron Watkins, an Enron executive, tried to blow the whistle to the energy company's chief executive about problems with its accounting of the partnerships and US lawmakers revealed on Wednesday that she also warned Andersen of her concerns.

Watkins contacted Enron chief executive Kenneth Lay on August 15 and then an unidentified partner at Andersen on August 20, said Republican Reps Billy Tauzin and James Greenwood of the US House Energy and Commerce Committee.

"I am incredibly nervous that we will implode in a wave of accounting scandals," Watkins wrote in a letter to Lay.

The Anderson partner she spoke to relayed Watkins' concerns to senior management on the Enron account and at the auditor's Houston office, according to the lawmakers.

Andersen spokesman Charlie Leonard told Reuters on Wednesday that when the audit team learned of Watkins' concerns, they notified top Enron officials.

"They were assured by Enron that Enron was dealing with the matter by bringing in (the law firm of) Vinson & Elkins to investigate her concerns."

Enron was forced to seek protection from creditors on Decemebr 2, filing the biggest bankruptcy in US history, throwing thousands out of work and leaving investors holding nearly worthless shares in the once giant energy trader.

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