BRUSSELS -- The EU must rapidly tighten up accounting guidelines to avoid the kind of scandals that have shaken corporate America and fueled a stock market collapse, officials said Tuesday.

EU foreign ministers agreed this week to develop an "action plan on company law including corporate governance" for the 15-member bloc, notably singling out the role of corporate bosses.

"Such an action plan should be in particular a considered response to recent corporate failures," the ministers concluded, in a clear reference to such corporate debacles as Enron and WorldCom.

The European Commission, the EU's executive arm, last year tasked a group of experts with reviewing continent-wide rules covering public tenders and modernizing company law.

In April this year the experts' mandate was widened after the Enron scandal erupted, as EU leaders sought to reduce the risk of such problems occurring in Europe, AFP reported.

Among top priorities of the group, chaired by Dutchman Jaap Winter, was corporate executive pay, as well as the role of auditing committees and non-executive directors.

Scandals like Enron and WorldCom hit investor confidence in the United States but also further afield at a time when the global economy was only just struggling to emerge from a slowdown.

Stock markets worldwide have recorded stunning falls in recent weeks that have raised fears the biggest economies could be sinking back into recession.

EU leaders are determined to ensure that doubts about corporate credibility do not endanger any recovery.

Last month Germany revealed plans to beef up the regulatory powers of its financial sector watchdog, Bafin, turning it into a sort of "accounting police" along the lines of the U.S. Securities and Exchange Commission (SEC) in the fight against balance-sheet fraud.

"The view that deregulated financial markets would themselves be the best placed to serve as a monitoring body ...

has turned out to be a mistake," said Finance Minister Hans Eichel at the time.

Over the summer the United States passed the corporate auditing accountability law, otherwise known as the Sarbanes-Oxley Law, which establishes an independent board to set standards and discipline auditors of public companies.

"This law was one of the things taken into account by the group of experts," said a spokesman for the EU's Internal Market Commissioner Frits Bolkestein on Tuesday.

Bolkestein is due to meet Sec Chairman Harvey Pitt on October 9 in Brussels to discuss the U.S. law, among other matters, the spokesman added.

Accounting standards will also be on the agenda: Brussels wants EU firms listed in the United States and conforming to international guidelines to be exempted from strict new U.S. rules.

The European Commission said it was still too early to comment on the conclusions of the expert report, which is expected some time this month.