(In paragraph 2, corrects description of PCAOB)

By Douglas Gillison and Chris Prentice

WASHINGTON, March 19 (Reuters) - Wall Street's top regulator is forming a new enforcement unit for accounting matters while cutting staff at an outside watchdog formed to police the accounting industry in the wake of the Enron-era scandals of the early 2000s, according to job postings and a person familiar with the matter.

The moves suggest the U.S. Securities and Exchange Commission is seeking to absorb some functions normally assigned to the Public Company Accounting Oversight Board, an organization that has fallen into disfavor in Republican-controlled Washington.

The SEC has posted jobs online for a new group aimed at policing misconduct related to the Sarbanes-Oxley Act of 2002, a response to a series of accounting scandals and auditing failures that led to the bankruptcies of Enron and WorldCom.

The new "SOX" group will "investigate and litigate matters involving potential violations of auditing and related professional standards and provisions of the Sarbanes-Oxley Act and other relevant federal securities laws," the SEC said in one of the postings.

The SEC already does such work, alongside the PCAOB, a nonprofit created as part of the same 2002 law. Questions about the future of the PCAOB have mounted under Republican leadership that has long been critical of the watchdog. 

The SEC, which oversees the organization, has slashed the PCAOB's budget under Chairman Paul Atkins. While recognizing the need for its core functions, Atkins has said the organization is a costly burden on free enterprise and has publicly discussed allowing the SEC to absorb the PCAOB's work.

Republican lawmakers last year considered legislation to effectively end the PCAOB but it has risen in prominence in recent years as U.S. officials pushed for greater oversight of accounting at Chinese companies that Washington accused of flouting accounting standards.

An SEC spokesperson said Thursday that auditors were "critical gatekeepers" for ensuring the integrity of financial markets and helping prevent fraud. 

"Additional hires in the enforcement division will continue the commission's longstanding efforts to crack down on bad actors in the profession," the spokesperson said.

The PCAOB has offered buyouts to some staff, according to a person with knowledge of the matter. 

A PCAOB spokesperson declined to comment. 

Under Atkins, the SEC has experienced a sharp staffing retrenchment, with prominent changes to practices and structure in enforcement while dropping a string a major cases. His enforcement director abruptly resigned on Monday.