DiPiazza said auditors should vouch for such things as management opinion of the overall health of the business and free cashflow, which currently fall outside of US generally accepted accounting principles, commonly known as GAAP.

He said: 'We support oversight of the profession and greater accountability for individuals. But the traditional audit opinion needs to be rethought if we are going to restore public trust [in company financial statements].'

His comments made to the FT come as Republicans and Democrats debate the range of corporate forms needed in the US following the collapse of WorldCom and Enron.

A Senate Bill, led by Democrat senator Paul Sarbanes, revealed a raft of measures, including setting up a new professional watchdog and a clampdown on auditor independence.

At the same time the Republican House has rushed to get its own set of measures to tackle corporate fraud and accounting breaches approved. The House Bill calls for a professional watchdog, but one with less powers and with more representation from the profession