From: Murray Exdroola
Sent: Tuesday, August 27, 2002 9:44 PM
Subject: Release #33-8089 Acceleration of periodic report filing dates
(s7-08-02)

It is unfortunate to see that the SEC appears to be
bowing to political pressure to act tough on
corporations by requiring quarterly and annual reports
to be filed sooner. This is a rule that will lead to
less accurate and less timely statements instead of
the more timely statements promised.

Companies cannot (and will not when required to
certify the accuracy of results) shorten the amount of
time necessary to gather and process their
information. Any accountant not hidden in the ivory
tower world knows that companies achieve deadlines by
establishing cut-off dates. In order to have the time
to properly prepare the required reports sooner,
companies will (and have already begun to) move back
their cut-off dates.  Payroll information that
previously had been cut-off one or two weeks before
month (or quarter, or year) end will now be cut-off
three weeks or a month early.  Accounts payable which
went through month end will be cut-off two weeks
early. The extended gaps in time through the end of
the period are "properly" (in accordance with
GAAP) accounted for by accruals, which will be
estimated based on the early cut-off information.

As a result, you will be presenting stockholders,
lenders, etc. with (as an example) a quarter ended
September 30th that will in reality be the two months
ended August 31st plus an estimate for one month.

This does not give "real teeth and meaning" to
anything but a sham.

A much better approach would be to separate the close
relationships between companies and their auditors.
This goes beyond limiting the types of services audit
firms can provide to clients. Any large company has an
inordinate number of senior financial staff who came
from their long time audit firm. Requiring a change in
the audit partner is a step to limit outright fraud,
but does not prevent companies from exerting pressure
to use "aggressive" accounting methods.

Companies should be required to keep an audit firm for
five years, unless they can show compelling reasons
why a change is needed, and after five years must
change audit firms. Add that there must be a ten year
gap before bringing back an audit firm and the auditor
will then become (for the first time) truly
independent. Audit firms will not be harmed by losing
large clients, since they will be able to gain others
lost by their competitors.

Hopefully the SEC will realize that what might look
good in press releases doesn't always make for good
policy.

Thank you for your time.