American Federation of Labor and Congress of Industrial Organizations
January 21, 2003
BY ELECTRONIC MAIL AND COURIER
Jonathan G. Katz, Secretary
Re: File No. S7-46-02
Dear Mr. Katz:
On behalf of the American Federation of Labor and Congress of Industrial Organizations, I welcome this opportunity to offer our comments on the Securities and Exchange Commission (the "Commission") proposal, S7-46-02, regarding the Retention of Records Relevant to Audits and Reviews.
The AFL-CIO is the federation of America's labor unions, representing more than 66 national and international unions and their membership of more than 13 million working women and men. Union members participate in the capital markets as individual investors and through a variety of benefit plans. U.S. workers' benefit plans have over $6 trillion in assets. Union-sponsored pension plans account for $400 billion of that amount.
In general, we support the Commission's proposed rules, consistent with the requirements of the Sarbanes-Oxley Act, governing the retention of audit work papers and strongly favor the implementation of uniform documentation standards for all audits and reviews. Most importantly, we believe that such rules are essential to permit the effective functioning of the newly created Public Companies Accounting Oversight Board ("PCAOB").
To ensure that PCAOB can adequately perform its duties, which include conducting inspections of registered public accounting firms, we recommend that the Commission's final rules adopt retention standards equivalent to those governing audits of not-for-profit organizations and state and local governments as established by the U.S. General Accounting Office in its "Yellow Book". We note that the State of California recently enacted legislation that adopts essentially the GAO standard for documentation of working papers for all audits, not just audits of publicly traded companies.1
We thank you for this opportunity to comment on this important proposal, and hope that the Commission will consider our comments in formulating its final rule.
cc (by courier)
Harvey L. Pitt, Chairman
Paul S. Atkins, Commissioner
Roel C. Campos, Commissioner
Cynthia A. Glassman, Commissioner
Harvey J. Goldschmid, Commissioner