Subject: File No. 4-497
From: Anonymous CPA
Affiliation: CPA and Consultant

March 6, 2005

March 4, 2005

Dear SEC,

I am writing to describe my experiences and observations as a CPA and consultant in Silicon Valley assisting publicly traded companies comply with the internal controls component of Sarbanes Oxley SOX 404. Im writing this letter anonymously since opposition to SOX 404 is huge in Silicon Valley. If my views on SOX 404 were to be known by my clients and contacts, Im sure my career opportunities would be negatively impacted.

In my opinion, SOX 404 has been a benefit to the functioning of accounting and finance teams in Silicon Valley. I have been dealing with public companies in Silicon Valley over the last five years as an auditor for one of the Big Four and as a consultant in advising companies. Prior to 2000, I was an auditor for the same Big Four in the Midwest. Throughout my time in Silicon Valley, I have dealt with mostly small and mid size companies from 10 million to 500 million in annual sales.

Before SOX 404, most of the companies I dealt with did not regularly reconcile accounts on the balance sheet. When they did perform them, they were often prepared incorrectly as rollforwards not actual reconciliations between support and the accounting balance in the ledger. Reviewing journal entries, even if only the significant entries, was not considered necessary. Budgeting and forecasting was considered a formality not relevant to small companies since their income statements were so volatile or unpredictable yet the CFO could provide quarterly guidance.

One of the key changes SOX 404 has made is shifting the focus of the CFO back to the business. Prior to SOX 404, most of the CFOs focus was on managing the outward appearance of a companys finances -- issuing press releases, presenting to investor conferences, holding earnings conference calls -- while neglecting the actual operations of finance and accounting team. Im of the opinion that a CFOs role is two sided. A CFO should present the finance results to investors and stakeholders accurately and timely while directing and monitoring the process of recording the financial results. If a CFO cannot fully perform both tasks then they should be delegated or empower a team member to assist him.

In closing, I urge the Commission to not change or modify SOX 404 at this time. Rather, I suggest the rules be given time to work properly and be fully interpreted by the accounting firms, industry and advisors. For instance, the new COSO standard for small companies expected this summer is one example of the development of new interpretative guidance.

Respectively yours,
A Silicon Valley CPA