More Information on Second Auditor Independence Rule Proposal Hearing

FOR IMMEDIATE RELEASE

2000-114

Washington, D.C., August 17, 2000 – Today the Securities and Exchange Commission announced additional information concerning its second public hearing on the proposed auditor independence rules.

Testimony: Any member of the public wishing to testify at the hearing must submit a written request to the Commission, which must be received by August 25, 2000. Persons requesting to testify must submit three copies of their oral statement or a summary of their intended testimony to the Commission, which must be received by September 5, 2000. (Those who do not wish to appear at the hearings, but want their views included in the public file, may submit written comments by September 25, 2000.)

Requests to testify, oral statements or summaries, and written comments should be mailed to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549 or submitted electronically at rule-comments@sec.gov. The words "Request to Testify" should be clearly noted on the subject line of the request. All requests and other submissions also should refer to Comment File No. S7-13-00.

Format: After September 5, 2000, the Commission will publish a schedule of witnesses. Based on the number of requests received, the Commission may not be able to accommodate all requests to testify at the hearing. The Commission also may limit the time for formal presentations or group presentations into a series of panels. Time will be reserved for members of the Commission and Commission staff to pose questions to each witness concerning his or her testimony as well as other matters pertaining to the rule proposal. Jonathan G. Katz, Secretary of the Commission, will serve as the hearing officer.

Summary of Rulemaking: The proposals modernize the Commission’s auditor independence requirements by providing governing principles for determining whether an auditor is independent in light of: investments by auditors or their family members in audit clients, employment relationships between auditors or their family members and audit clients, and the scope of services provided by audit firms to their audit clients.

The proposals would, among other things:

• significantly reduce the number of audit firm employees and their family members whose investments in audit clients are attributed to the auditor;
• identify certain non-audit services that, if provided to an audit client, would impair an auditor’s independence. (The scope of services proposals would not extend to services provided to non-audit clients.);
• provide a limited exception for accounting firms that have certain quality controls and satisfy other conditions; and
• require companies to disclose in their annual proxy statements certain information about, among other things, non-audit services provided by their auditors during the last fiscal year.

Contacts: John M. Morrissey, Deputy Chief Accountant and W. Scott Bayless, Associate Chief Accountant, Office of the Chief Accountant at (202) 942-4400.