January 2, 2003

Mr. Jonathan G. Katz, Secretary
U.S. Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549-0609
File No. S7-49-02

Dear Mr. Katz:

Burton McCumber & Cortez, L.L.P. (BMC) is a regional public accounting firm located in Texas and is a member firm of the AICPA's SEC Practice Section (SECPS). BMC provides auditing services to three registrants and currently has a total of seven partners licensed to practice public accounting in Texas. Prior to the Sarbanes-Oxley Act of 2002 (Act), BMC was exempt from the partner rotation rules of the SECPS due to the limited number of partners and registrants audited.

BMC has the following comments regarding partner rotation under the Proposed Rules:

  1. The Proposed Rules seem to be directed toward large accounting firms rather than smaller firms. The Proposed Rules discuss "national office" partners who may be involved with registrants on specific accounting issues or in a quality control function and concludes that these individuals would not be involved in the audit per se. In smaller firms, registrants are generally significant clients of the firm and as a result many, if not all, of the firms partners may become involved in the audit process. This involvement by the firm's partners would tend to indicate better quality control than would a rotation policy aimed only at replacing one or two partners with other partners.

  2. In the near term, many firms, particularly smaller firms, may not have the alternative partner resources to affect a rotation without going outside of the firm for the needed expertise. If the firm has a limited number of registrant clients, the cost may very well be disproportionate to the benefits and the firms may be forced to cease providing auditing services to registrants. In BMC's case, there are no other accounting firms within our geographic region who provide auditing services to registrants. Therefore, if we were unable to continue providing services to registrants due to the rotation requirements of the Proposed Rules, our registrant clients may be forced to engage firms from other areas of the country. More likely than not, the registrant's cost would increase and could result in diminished service. Such a situation would be undesirable for BMC, its registrant clients and their shareholders.

  3. Assuming that a firm has audited a registrant for at least five years, the Proposed Rules assumes that public accounting firms have at least four partners with requisite experience to provide services to registrants. Most smaller firms have a limited number of registrant clients and therefore probably do not currently have, as a result of the existing exemption from rotation provided by the SECPS, the expertise for immediate rotation.

  4. The Proposed Rules are unfair to small public accounting firms and small registrants. BMC does not believe that Congress intended to restrain trade. With the reduction in the number of major firms, there is a question as to whether the major firms can or will find it desirable to provide audit services to smaller registrants under any circumstances. If the number of firms allowed to provide audit services to registrants is reduced through the rotation requirements of the Proposed Rules, then this problem is compounded. Smaller companies may not be able to access the public markets because they may not be able to engage auditors.

  5. The Proposed Rules are unclear as to whether the five year period includes years prior to a firm's registration with the Public Company Accounting Oversight Board or if the five year period begins with a firm's registration with the Board. If the Proposed Rules are intended to include the prior years, then the five year period should begin upon registration with the Board for small firms which were previously exempt from the rotation requirements under the SECPS rules. This would allow small firms the necessary time so that qualified partners can be hired and/or qualified personnel promoted and properly trained.

BMC believes that the rotation requirements of the Proposed Rules should be limited to one year, at least for small firms, as provided for by Congress in the Act. In this manner, a small auditing firm with only two partners qualified to do audits for registrants could rotate one partner off an engagement and engage (employ) a concurring partner from outside the firm. The shareholders of the registrant would have the benefit of "new eyes", the registrant would have the continuity and the firm could retain the client. BMC has already implemented this procedure following the passage of the Act (before the issuance of the Proposed Rules) based on the one year rotation requirement provided for in the Act.

Thank you for the opportunity to comment on this monumental change in the law. We trust that our concerns will be addressed such that smaller accounting firms can continue to provide services to registrants to the benefit of the auditing firms, the registrants and their shareholders.

Very truly yours,


/s/ Richard L. Burton

Richard L. Burton
Managing Partner