PUBLIC HEARING ON AUDITOR INDEPENDENCE RULES
JULY 26, 2000
Comment File No. S7-13-00
Summary of Intended Testimony
Nimish P. Patel, Esq., CPA
Pollet & Richardson
By way of background, I am a former auditor with the national accounting firm of Deloitte & Touche. I am currently a corporate securities attorney at Pollet & Richardson, a law firm based in Los Angeles, California. As a corporate securities attorney, I advise and represent several public companies. In addition to these roles, I am also an investor in the US securities markets. As part of my introductory section of my testimony, I will elaborate more on my background as it relates to being a former auditor having worked with public company engagements, and legal counsel currently representing public companies. I intend to focus on the distinction of being an advocate for a company versus one who is independent from the company and how the two roles are viewed by the investing community.
I intend to describe the fundamental flaw that exist with an independent auditor who is paid by the very company that is requesting an independent report. I intend to state, that the proposed rules do not correct nor address this issue but recognizing that the cost benefit analysis of any other alternatives do not justify any other course at this time.
I intend to provide testimony on how the proposed rules will continue to ensure the public confidence in the audited financial statements that are being presented in securities registration statements. I wish to also elaborate on how much significance the investment community places on the financial statements and the importance of its integrity. Finally, I intend to address any other issues brought forth by the other witness.