From: Frederick D. Lipman
Sent: May 11, 2005
Subject: File No. 265-23

One of the main reasons that Section 404 costs have been so high is that the Big four auditing firms have been given a monopoly on Section 404 attestations for their audit clients. If a public company wishes to use someone else for the Section 404 attestation, they can not do so without also changing auditors. This tie-in has created virtual monopoly pricing for Section 404 services, because of the lack of competition.

I would recommend that smaller companies be permitted to use for Section 404 attestations any auditing firm (not just their own financial statement auditor) which is registered with the Public Company Accounting Oversight Board. This would permit smaller companies to develop pricing competition for Section 404 attestations without being required to change auditing firms for their financial statements.

Since Congress and the SEC inadvertently created a situation in which there is virtual monopoly pricing by tying two services together, the SEC should correct the situation for as large a group of companies as possible. Therefore, I would permit any company which is not an accelerated filer to take advantage of this more liberal Section 404 policy.

Frederick D. Lipman
Blank Rome LLP
Philadelphia, PA