NEW YORK (CNN/Money) - The Securities and Exchange Commission is investigating Arthur Andersen LLP's role as auditor for three telecom firms whose accounting practices currently are under review by the SEC, according to a published report Friday.

The SEC is not conducting a separate inquiry into Andersen's role as accountant for Global Crossing Ltd., Qwest Communications International Inc. and WorldCom Inc., but the agency is looking at the embattled firm's suggestions on capacity swapping and accounting methods, according to the Wall Street Journal.

The agency is investigating network swapping practices with Global Crossing and Qwest and accounting methods with WorldCom.

Network swapping involves selling optical capacity to another company and then buying capacity from the same firm.

Global Crossing's chief executive, John Legere, testified before the House Financial Services Committee, saying Arthur Andersen guided the company's use of swaps and the practice was "fully and fairly" disclosed, the paper reported.

An Arthur Andersen spokesman acknowledged the SEC requested information from the firm, but these requests are common, especially when a client is being investigated.

"Andersen auditors conducted their audits properly and in accordance with SEC and professional guidelines at all times," the spokesman told the paper. "As we normally would, we have provided information to the SEC regarding their inquiries that are focused on other subjects."

The new probe into Arthur Andersen's role with the telecom firms follows a "not guilty" plea by the firm after the Department of Justice indicted the company on obstruction of justice charges related to its role in Enron's collapse.

Meanwhile, partners at Arthur Andersen LLP discussed waving the firm's noncompete clause, which bars employees from working with their former Andersen clients if they move to a rival accounting company, the Journal reported.

The move to waive the clause comes as competing firms look to pick up Andersen's employees and clients but not the firm itself due to its liability stemming from Enron.

Separately, SEC Chairman Harvey Pitt lashed out at critics who call his plans for reform in the accounting industry too soft.

Responding to a question before the Senate Banking Committee, Pitt said the media misrepresented his plan and critics were being petulant by suggesting his past involvement with the accounting industry influenced his policy.

"What I think we've come up with has been deliberately mischaracterized in the media, and I think the program we have is something that this Congress should be proud of," Pitt told the committee, as reported by the Journal.

Pitt opposes any regulation that would mandate accounting firms to separate auditing and consulting operations, a practice that raised the question of conflict of interest in Arthur Andersen's role in Enron's collapse.

Pitt formerly served as an attorney for all of the Big Five accounting firms.