From: John.RIEGER@oecd.org
Sent: Friday, June 28, 2002 10:12 AM
To: rule-comments@sec.gov
Subject: Comments regarding POB

To the SEC:

I commend you for the draft proposed framework of a Public Accountability
Board. The recent market events have damaged confidence and without swift
action from government (such as the government response in the formation of
the SEC back in the 30's) it could take several years before investors
return. OECD member and non-member work depends significantly on following
"best practices" and often the process used by the United States is the
basis for these best practices. I also agree in the concept of avoiding the
term "self-regulation", which in today's economic environment should no
longer be used in relation to the oversight of the audit function. Some
areas to be careful of when preparing the detailed workplan and in the
formation of the PAB:

1. Make sure a fair and transparent selection process exists for the members
of this board. Credibility has been tainted from both the large political
contributions made to parties and the large lobby influence that the AICPA
has. I am aware of the problems Mr. Busher had with the former AICPA POB.
This should be absent of insider manipulation. 

2. PAB reviews on an annual basis do appear frequent enough. However, they
should not be limited on the selection process for audit workpaper review. A
random statistical sampling to review workpapers will not be adequate since
any auditor is able to make the workpapers appear in compliance when the
audit is really wrong. Remember the last peer review done on Andersen gave
them a clean opinion. 

3. Make sure the board selection is fair and mandatory rotation is built
into the PAB board to make sure that the board itself does not become made
up of "good old boys';  someone who takes a position and never has to leave.
This will also help prevent what often happens with oversight boards of them
becoming simply special interest organisations with a self serving role or
becoming ineffective. 

4. Registration to the PAB should require certain reporting requirements
from the audit firm. The PAB should be looking at the Corporate Governance
of the Audit firm. The SEC has focused a lot on the Corporate Governance of
listed companies but there is little responsibility on the audit firms to
protect from tainted goals and objectives. 

5. Please be aware that while the big 5 (final 4) are global, they really
operate often only in name outside of the US. This is why Andersen's other
offices could so quickly leave the system. This is something that also needs
to be considered on oversight since the PAB will not have legal authority on
those offices that are performing the audit of the activities outside of the
United States.  

6. As certain reviews have proven, the structure should be set up to
encourage other audit firms to participate.It should not be assumed that
only the big 4 have the license to audit. The PAB should be set up so not to
exclude audit market competition and participation. There already are those
concerned with the current audit oligopoly. 

John R. Rieger CPA
Principal Administrator
Financial Transparency 
OECD
2, rue Andre'-Pascal
75775 Paris Cedex 16, France
+33 (0) 1 49 10 42 80
+33 (0) 1 49 10 43 53 fax
john.rieger@oecd.org 
www.oecd.org/daf/corporate-affairs/