The S.E.C. also found that from 1996 to 1998, five Coopers partners had owned investments in 31 publicly traded companies that the firm audited.

But should these same accounting firms also audit the company's financial statements and provide the essential "second look" at the numbers that lets investors sleep at night?

The amendments require that a firm should not audit a client's financial statements where they include the product of a 'specialist valuation' carried out by it.

Mr. McCormac has appointed a committee to review the funds' administration and this week selected a firm, Independent Fiduciary Services, to audit the pension program.

The S.E.C. had contended that PricewaterhouseCoopers was not sufficiently independent because some employees owned stock in companies the firm audited.

The firm audited the books of the Grabill Corporation, a Chicago real estate company run by William J. Stoecker.

The firm had audited the books of the general partnership as well as dozens of limited partnerships that the teachers had invested in.

Federal regulators have become concerned about the Big Six firms' burgeoning consulting practices, which can lead to potential conflicts of interest if the consulting is done for companies that the firms also audit.

The firm audited two subsidiaries in the Netherlands Antilles, Zilpa and Curcastle, that investigators have said were devised so that invented assets could offset Parmalat liabilities.

Immediately, Bower tried to convince McKinsey that no self-respecting firm could audit the books of a business to which it was also consulting.