Days after the guilty verdict in the obstruction of justice case against Arthur Andersen, the US Congress and the Securities and Exchange Commission (SEC) are moving separately to discipline the accounting industry with tough new regulations, writes  Conor O'Clery, International Business Editor, on Wall Street

The moves are the long-awaited response to a US accounting profession that has earned notoriety for failing to discipline its members and resisting change in the way it is policed, even in the face of public outrage over high-profile cases where auditors connived at misleading shareholders.

Today SEC chairman Mr Harvey Pitt will formally introduce a blueprint for an unexpectedly strong oversight board with at least six independent members alongside three accounting professionals who will have no vote on disciplinary matters. It will have the power to impose fines and suspensions.

The Senate Banking Committee has gone further, overcoming fierce lobbying from the accounting industry to vote through radical proposals. These include: a five-member independent oversight board; a limit of five years on any senior audit partner working on a corporate account; a ban on audit firms from several types of consulting service.

Despite speculation that Mr Pitt would bow to pressure from the industry because of his background as a private lawyer for the top five accounting firms for more than 20 years, the SEC chairman's new oversight body will have more disciplinary power than Republican members of Congress wanted. Mr Pitt was appointed by President George W Bush.

The SEC is fulfilling its promise to punish corporate executives who manipulate accounting numbers, and the regulatory body is its response. It has the authority to establish such a board, unless Congress supersedes it with different legislation. Up to now, accountancy firms in the US were regulated by a self-policing Public Oversight Board, which had become a travesty. It depended on the industry for its funding and had no power to issue subpoenas or to impose meaningful penalties. Its inadequacies came to light with the collapse of energy giant Enron and other audit-related scandals in corporate America.

In a stinging rebuke to the accounting profession, the Senate Banking Committee approved legislation on Tuesday creating a separate oversight board to set audit standards, limit consulting work and discipline offending auditors.

Representatives of audit firms reacted by warning that such measures would impose unworkable restrictions on members. But a continuing string of scandals over chief executives who grabbed companies' wealth, evaded tax, indulged in insider-trading and enriched themselves by off-loading shares before bad news was announced, has hardened the public mood against their case.

Several Republican legislators who had taken a softer approach threw their weight behind Democratic-drafted legislation in the Banking Committee.

Republican Senator Michael Enzi of Wyoming said: "It seems as if every day when I wake up and open the morning paper, there is another correction by a company of its financial statements."