FOR IMMEDIATE RELEASE                                  99-127



                        Fact Sheet
       SEC Proposals Implementing Blue Ribbon Committee's
                         Recommendations
             Regarding Audit Committee Effectiveness
                         October 6, 1999

     The Commission today proposed new rules to improve
disclosure about the functioning of corporate audit committees
and to enhance the reliability and credibility of financial
statements of public companies.  The proposed disclosures will
help inform investors about the role audit committees play in
overseeing the preparation of financial statements and underscore
the importance of their participation in the financial reporting
process.  In addition, by requiring companies to have their
auditors review interim financial statements, the proposals
should facilitate early identification and resolution of
significant accounting issues.

     The proposals are part of the Commission's continuing
efforts to improve the quality of financial reporting.  In his
September 1998 speech entitled The Numbers Game, Chairman Arthur
Levitt set forth an action plan to address certain abuses in
financial reporting, better known as "earnings management."
These proposals represent further progress on that plan.

     The Commission's proposals are part of a broader effort by
the securities exchanges and the accounting profession to improve
the oversight of financial reporting by corporate boards.
Proposals for action by each of the different groups were set
forth in the Report and Recommendations of the Blue Ribbon
Committee on Improving the Effectiveness of Corporate Audit
Committees.  The Blue Ribbon Committee was a prestigious group of
business, accounting, and securities professionals led by John
Whitehead and Ira Millstein.  Today's proposals coincide with
proposed rule changes by the New York Stock Exchange, the
American Stock Exchange, and the National Association of
Securities Dealers.  The proposed rule changes by the securities
markets would:

     * define "independence" more rigorously for audit committee
       members;
     * require audit committees to include at least three members
       and be comprised solely of "independent" directors who are
       financially literate;
     * require companies to adopt written charters for their audit
       committees; and
     * require at least one member of the audit committee to have
       accounting or financial management expertise.

          Last week, the AICPA's Auditing Standards Board
proposed to require independent auditors to discuss with the
audit committee the auditors' judgment about the quality, and not
just the acceptability under Generally Accepted Accounting
Principles, of the company's accounting principles as applied in
its financial reporting.

          The Commission proposed today to require, among other
things, that:

     * companies' interim financial statements be reviewed by
       independent auditors before companies file their Forms 10-Q and
       10-QSB with the Commission;
     * companies provide in their proxy statements a report from the
       audit committee that discloses whether the audit committee
       reviewed and discussed certain matters with management and the
       auditors, and whether anything came to the attention of audit
       committee members that caused them to believe that the audited
       financial statements contain any materially misleading               
       statements or omit any material information;
     * companies disclose in their proxy statements whether the
       audit committee has a written charter, and file a copy of their
       charter every three years; and
     * companies whose securities are listed on the NYSE or AMEX or
       are quoted on Nasdaq disclose certain information about any               
       audit committee member who is not "independent" within their        
       proposed definition.  (All other companies must disclose, if               
       they have an audit committee, whether the members are        
       "independent" based on the definition proposed by the SROs.)

     The public is requested to comment on the proposals within
45 days.  For additional information, contact Meridith Mitchell
at (202) 942-0900, or W. Scott Bayless or Robert Burns at (202)
942-4400.

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