The Senate banking committee is scheduled to review today a bill that would create a federal panel overseeing the accounting industry.

Today, the Senate banking committee is supposed to begin the markup of the bill. That is congressional parlance for the negotiations and modifications needed to get the measure out of committee and before the full Senate.

The bill, sponsored by Sen. Paul S. Sarbanes, the Maryland Democrat who heads the committee, calls for the creation of a five-member board to oversee the outside auditors of U.S. public companies. The board would have subpoena power and the authority to hand out fines.

There has been a push for reform in the wake of the scandal at Enron Corp. and the criminal conviction of its auditor, the accounting giant Arthur Andersen.

Another need for better oversight has arisen over the disclosure that many outside auditors also performed consulting work for their clients, a potential conflict of interest. These and other financial improprieties went undiscovered for long stretches.

One of the bill's proposed regulations places restrictions on work an outside auditor can do for a company.

Sarbanes declined to be interviewed for this article. Members of his staff said he wished to avoid public pronouncements as the committee seeks a compromise on the bill's language.

Under the bill, no more than two of the board's five members would be permitted to have backgrounds in accounting. The Securities and Exchange Commission would oversee the board and appoint its members, but its financing would come from public companies.

Backers say the bill is needed to rebuild investor confidence sapped by the paper-shredding debacle at Arthur Andersen and other subsequent accounting scandals.

The lack of confidence hangs over the stock and bond bond markets like a dark cloud, said Grace Hinchman, a senior vice president at Financial Executives International, an industry group representing corporate America's senior financial executives.

The organization is backing Sarbanes" bill.

"Our membership is concerned about the continued lack of return in investor confidence." Hinchman said. "This [lack of confidence] is something we feel has been exacerbated by the continued bad stories [of] poor financial reporting, restatements of earnings, or poor corporate governance.

"Something needs to be done to restore confidence to the world's greatest marketplace. This proposed legislation helps to do that."

Opponents say the proposed board would be nothing more than more business-stifling bureaucracy.

In an "action alert' memo to its membership, the American Institute of Certified Public Accountants detailed its reservations about the legislation and urged members to express these concerns to Senate banking committee members.

"The proposal would M-' create an unnecessary government bureaucracy that would cause harm to the market and to investors." said the letter, signed by J. Thomas Higginbotham, an institute vice president.

"An oversight board would be appointed by the SEC and dominated by the government and effectively transfers the power to set auditing, quality control, ethics and independence standards for the accounting profession from the private sector to a government board."

As of Friday, 47 amendments and notices to file amendments had been offered, including 40 by Republicans. Thirty-two of the 40 were filed by Sens. Michael B. Enzi of Wyoming and Phil Gramm of Texas.

Gramm, the committee's ranking Republican, was unavailable for comment yesterday. One of his proposed amendments would constrain the authority of the board by keeping it out of areas policed by the SEC or federal banking agencies.

A rival House proposal has been labeled "inadequate' by Sarbanes, said a member of his staff.