SECURITIES AND EXCHANGE COMMISSION

Release No. 33-7872

Revision of the Commission's Auditor Independence Requirements

AGENCY: Securities and Exchange Commission

ACTION: Notice of Hearings

SUMMARY: On June 27, 2000, the Securities and Exchange Commission (the "Commission") approved proposed rule amendments (the "Proposing Release") regarding auditor independence (Securities Act Release No. 33-7870). Copies of the Proposing Release are available on the Commission's website at www.sec.gov. In connection with those proposals, the Commission announced that it will hold public hearings. The purpose of the hearings is to give the Commission the benefit of the views of interested members of the public regarding the issues raised and questions posed in the Proposing Release. The Commission is announcing that the initial public hearing will be held on July 26, 2000 in Washington, D.C. Additional public hearings will be held in September.

DATES: The initial public hearing will be held on July 26, 2000 in Washington, D.C. Additional public hearings will be held in September. The following information pertains to the July 26th hearing. The hearing on July 26 will begin at 9:00 a.m. Those who wish to testify at the hearing must submit a written request to the Commission. The Commission must receive these requests on or before July 17, 2000. Persons requesting to testify must also submit three copies of their oral statement or a summary of their intended testimony to the Commission. The Commission must receive these submissions on or before July 21, 2000. Those who do not wish to appear at the hearings may submit written testimony on or before the end of the comment period for the Proposing Release, which is 75 days after publication of the Proposing Release in the Federal Register, for inclusion in the public comment file. Additional information regarding the September hearings will be forthcoming.

ADDRESSES: The July 26, 2000 hearing will be held in the William O. Douglas Room of the Commission's headquarters at 450 Fifth Street, N.W., Washington, D.C. 20549. Persons submitting requests to appear or written testimony in lieu of testifying should file three copies of the request or testimony with Jonathan G. Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20459. Persons requesting to appear should also submit three copies of their oral statement or summary of their testimony to the same address. Requests to appear and copies of oral statements or summaries of intended testimony may be filed electronically at the following e-mail address: 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. Copies of all requests and other submissions and transcripts of the hearings will be available for public inspection and copying in the Commission's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. Electronically submitted requests and other materials will be posted on the Commission's internet web site (www.sec.gov).

FOR FURTHER INFORMATION CONTACT: John M. Morrissey, Deputy Chief Accountant, or W. Scott Bayless, Associate Chief Accountant, Office of the Chief Accountant, at (202) 942-4400.

SUPPLEMENTARY INFORMATION:

I. Summary of Rule Proposals.

The public hearings concern the Commission's proposed rule amendments regarding auditor independence. As more fully described in the Proposing Release, the proposals modernize the Commission's 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. They would also 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. The proposals also would provide a limited exception for accounting firms that have certain quality controls and satisfy other conditions. Finally, the proposals would 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. The Commission will consider the hearing record in connection with its rulemaking proposals.

II. Procedures for Hearing.

After July 17, 2000, the Commission will publish a schedule of appearances. Based on the number of requests received, the Commission may not be able to accommodate all requests for the July 26 hearing. It 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 Proposing Release. The Commission has designated Jonathan G. Katz, Secretary of the Commission, as the hearing officer. As noted, the Commission will hold additional public hearings in September. The Commission will issue other orders designating additional hearing officers as necessary.

By the Commission.

Jonathan G. Katz
Secretary

Dated: July 7, 2000