Some accounting experts are urging U.S. regulators to embrace a proposal to improve how auditors communicate their opinions on corporate financial statements to investors, saying such changes are long overdue.

Floated in August by the Public Company Accounting Oversight Board, the proposal would allow auditors to say more about their reviews of a company's finances, beyond just giving the books a "pass" or "fail" grade.

While the plan would retain today's pass/fail model, it would for the first time require auditors to provide more colorful commentary about "critical audit matters" detected in vetting a company's books, moving beyond "boilerplate" language.

To bolster auditors' independence from corporate managers, audit firms would also need to disclose how long they have worked for company clients.

The PCAOB's plan "fixes several glaring shortcomings in the current model," said Gaylen Hansen, a former chair of the National Association of State Boards of Accountancy, in prepared remarks delivered during a two-day roundtable convened in Washington by the PCAOB this week to get feedback on the plan.

"Today's auditor's reporting standard is akin to a windowless building lacking visual functionality. We can do better, and doing it is long overdue," Hansen added.

The PCAOB's proposal, if adopted by the board and ultimately approved by the U.S. Securities and Exchange Commission, would mark the biggest changes in the U.S. auditor's report in 70 years. Similar changes were made by UK regulators a few years ago.

The European Union on Thursday approved an even more sweeping reform. It would stop any listed company from using the same accountancy firm for more than 20 years, in an effort to break down what some say are too-cozy relationships between companies and the "Big Four" accounting firms - KPMG, PricewaterhouseCoopers,, Deloitte and Ernst & Young.

Term Limits Dropped

The PCAOB, a body created by Congress to police U.S. auditors in the wake of accounting scandals at Enron and Worldcom, recently dropped the idea of potentially imposing mandatory term limits on accounting firms after fierce lobbying by the industry.

The proposed changes to the auditor's report would be a less drastic change. They were debated at the roundtable in Washington, D.C., and are seen as likelier to win adoption in the United States, though not until 2015 or later.

Some panelists told the PCAOB they would like to see the proposal strengthened. David Tweedie, a former chairman of the International Accounting Standards Board, said the PCAOB might consider requiring disclosures about other matters, such as "management judgments and estimates, accounting policies and practices and the identification of where significant matters are disclosed in the financial statements."

"Here is a wonderful chance provided by the PCAOB to demonstrate to the public the worth of an audit," he said in prepared remarks.

Still, public companies and others who are involved in helping prepare financial statements also cautioned the PCAOB to tread with care. Many panelists at the roundtable this week said the proposed changes would add new costs and burdens on companies, and potentially cause misunderstandings by investors about "critical audit matters" or chill relationships between auditors and corporate audit committees.

"There will be additional time and expense associated with interacting with and providing information to the auditors," said Blackrock's managing director of global accounting policy Ann Cavanaugh in prepared remarks at this week's event.