Accounting expert Abraham J. Briloff believes that the check-kiting scheme at E. F. Hutton & Co. might have been uncovered sooner had the Securities and Exchange Commission implemented more stringent financial reporting requirements under the Foreign Corrupt Practices Act of 1977.

Congress passed the FCPA to curb what President Carter termed "ethically repugnant and competitively unnecessary" corporate foreign bribes to win contracts.

One provision of the act amended the 1934 Securities Exchange Act to require public companies to maintain "in reasonable detail" books and records that accurately reflected their transactions. The act also made it unlawful to knowingly falsify corporate records or to mislead outside accounting firms that audit those records. Many companies and their professional organizations had opposed these additional bookkeeping requirements, calling them too rigid.

Briloff, an accounting professor at City University of New York, told the House Energy and Commerce investigations subcommittee that the accounting establishment then joined corporate managements in resisting implementation of these requirements by the SEC.

In April 1979, the agency proposed implementing regulations, including a requirement that public corporations devise and maintain a system of internal controls. The SEC also proposed requiring that annual reports provide "reasonable assurance" that the internal controls were adequate and that the assurance be certified by the outside auditing firm.

Seven months later, however, the SEC, then headed by Harold Williams, a Carter appointee, withdrew the proposed rules for further deliberation. Seven months after that, in June 1980, the agency withdrew the proposed rules for three years, until mid-1982, saying it wanted to monitor "significant" initiatives taken by the private sector, including the American Institute of Certified Public Accountants.

Under SEC Chairman John S. R. Shad, President Reagan's appointee, the proposed regulations disappeared altogether. The agency now has no comment on their status.

Briloff was asked by a reporter whether Hutton's illegal check-kiting abuses might have been discovered sooner had the stricter reporting requirements sought by Congress been in effect.

Suppose, he replied, that Arthur Andersen & Co., Hutton's accounting firm, had probed more deeply into the internal control procedures at Hutton, and that Anderson "had reported the full range of implications of what it would have discovered to Hutton's board of directors, independent audit committee and management hierarchy?"

If all of these things had happened, it is "my considered view . . . that this elaborate scheme would have been aborted very early," Briloff said.