The Securities and Exchange Commission yesterday proposed ending the practice of requiring companies to tell investors when accounting firms responsible for corporate audits have other money-making arrangements with the audited company.

Saying that the information appears to be of little interest to investors, the commission proposed relying on the accounting profession itself to monitor such situations for possible conflicts of interest.

While the SEC reiterated its concerns that accountants stay clean, it also wiped out an action of two years ago in which the commission had outlined factors that bear on an evaluation of how performing other services for management might affect auditor independence.

"It appears to have served its purpose of making it clear that this is an important question," said Commissioner Philip A. Loomis Jr.

The commission was essentially undoing steps taken in 1978 and 1979 in reaction to revelations of corporate failures and payoffs. The actions reflected concern that an accounting firm's auditing judgment might be impaired by its desire to protect other business relationships with the firms being audited. The SEC did not proscribe such relationships but simply spelled out the way in which they must be disclosed to investors, in part to ward off congressional action.

The SEC proposal to undo those steps came in response to accounting firm complaints that they were losing management-services business because of corporate concerns about disclosure.

SEC Chairman John S.R. Shad said at one point that "with limited resources the commission can't be everything to all men," but the proposal to end disclosure in proxy statements appeared likely to produce little conservation of those resources. SEC officials said that although there are some costs in monitoring the disclosures, the accounting industry's concerns were a bigger motivating factor.

Commissioner John R. Evans said it is important that accounting firms and the public "understand this is not a change in attitude by the commission. I think the government should step in like this and then step out" when the need for public intervention has diminished, he said.

The SEC Practice Section of the American Institute of Certified Public Accountants is drafting changes in membership rules that will require disclosure similar to what the SEC now requires that it would monitor. The AICPA can impose sanctions -- including fines, expulsion and termination -- on members who violate principles of independence.

The deadline for public comment on the SEC proposal to withdraw the rule requiring disclosure of nonaudit services performed by independent auditors for the same firms is Nov. 30.