Investors typically rely on auditors to verify a company's financial wellbeing, enabling them to trust the company in which they buy shares.

As two new hearings got under way on Thursday, accountancy firm Andersen battled to save its reputation, insisting its senior management did not know about the shredding of documents related to Enron.

It is not just Andersen's reputation that is taking a battering: the hearings have triggered calls for closer monitoring of the whole industry.

More concessions?

In 2000, the Securities and Exchange Commission (SEC) backed away from a proposal to restrict audit firms' expansion into other business services.

At the time, it was felt that the Big Five - Andersen, KPMG, Ernst & Young, Deloitte & Touche and PricewaterhouseCoopers - had made just enough concessions to avoid serious shackling.

Now that the good behaviour clause has been breached, and with or without proof of malpractice at Andersen, the SEC is reckoned almost certain to introduce new restrictions on the sector.

The most draconian could be an attempt to force the Big Five to split their auditing from their consultancy divisions, and possibly even spin off marginal interests such as legal and human resources services.

Former SEC chairman Arthur Levitt has called for an agency to oversee the accounting profession.

This should be made up of independent individuals funded outside of the profession. He also wants to see the consultancy and auditing sides of the business separated.