The US Securities and Exchange Commission last night unveiled its blueprint for a new accounting oversight body, proposing a limited role for the tarnished industry in an effort to revive confidence in corporate earnings reports.

The SEC outlined plans for a nine-member public accountability board, to be established by the end of 2002. This would have the power to discipline misbehaving auditors, including fines, censures, removal from client engagements and suspension from auditing publicly traded companies.

The board would consist of six independent public members and only three accounting professionals, who would not be able to vote on any disciplinary sanctions.

Under the draft proposals, due to be issued for public comment at tomorrow's SEC open meeting, the new body would be funded by public companies as well as auditor members.

The news came as the US Senate banking committee, in an unexpected and important victory for reform-minded Democrats, overwhelming passed legislation that would impose stringent new controls on the accounting industry, including a blanket ban on performing most non-audit services for clients.

The bill is still not assured passage in the full Senate, as Senator Phil Gramm, the most powerful Republican on financial issues, said he would work to block it.