[Federal Register Volume 65, Number 135 (Thursday, July 13, 2000)]
[Notices]
[Pages 43385-43386]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-17725]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 33-7872]


Revision of the Commission's Auditor Independence Requirements

AGENCY: Securities and Exchange Commission.

ACTION: Notice of hearings.

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SUMMARY: On June 27, 2000, the Securities and Exchange Commission (the 
``Commission'') approved proposed rule amendments (the ``Proposing 
Release'') regarding auditor independence (Securities Act Release No. 
33-7870). Copies of the Proposing Release are available on the 
Commission's website at www.sec.gov. In connection with those 
proposals, the Commission announced that it will hold public hearings. 
The purpose of the hearings is to give the Commission the benefit of 
the views of interested members of the public regarding the issues 
raised and questions posed in the Proposing Release. The Commission is 
announcing that the initial public hearing will be held on July 26, 
2000 in Washington, D.C. Additional public hearings will be held in 
September.

DATES: The initial public hearing will be held on July 26, 2000 in 
Washington, D.C. Additional public hearings will be held in September. 
The following information pertains to the July 26th hearing. The 
hearing on July 26 will begin at 9:00 a.m. Those who wish to testify at 
the hearing must submit a written request to the Commission. The 
Commission must receive these requests on or before July 17, 2000. 
Persons requesting to testify must also submit three copies of their 
oral statements or a summary of their intended testimony to the 
Commission. The Commission must receive these submissions on or before 
July 21, 2000. Those who do not wish to appear at the hearings may

[[Page 43386]]

submit written testimony on or before the end of the comment period for 
the Proposing Release, which is 75 days after publication of the 
Proposing Release in the Federal Register, for inclusion in the public 
comment file. Additional information regarding the September hearings 
will be forthcoming.

ADDRESSES: The July 26,2000 hearing will be held in the William O. 
Douglas Room of the Commission's headquarters at 450 Fifth Street, 
N.W., Washington, D.C. 20549. Persons submitting requests to appear or 
written testimony in lieu of testifying should file three copies of the 
request or testimony with Jonathan G. Katz, Secretary, Securities and 
Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20459. 
Persons requesting to appear should also submit three copies of their 
oral statement or summary of their testimony to the same address. 
Requests to appear and copies of oral statements or summaries of 
intended testimony may be filed electronically at the following e-mail 
address: [email protected]. The words ``Request to Testify'' should 
be clearly noted on the subject line of the request. All requests and 
other submissions also should refer to Comment File No. S7-13-00. 
Copies of all requests and other submissions and transcripts of the 
hearings will be available for public inspection and copying in the 
Commission's Public Reference Room at 450 Fifth Street, N.W., 
Washington, D.C. 20549. Electronically submitted requests and other 
materials will be posted on the Commission's internet web site 
(www.sec.gov).

FOR FURTHER INFORMATION CONTACT:  John M. Morrissey, Deputy Chief 
Accountant, or W. Scott Bayless, Associate Chief Accountant, Office of 
the Chief Accountant, at (202) 942-4400.

SUPPLEMENTARY INFORMATION:

I. Summary of Rule Proposals

    The public hearings concern the Commission's proposed rule 
amendments regarding auditor independence. As more fully described in 
the Proposing Release, the proposals modernize the Commission's 
requirements by providing governing principles for determining whether 
an auditor is independent in light of: investments by auditors or their 
family members in audit clients, employment relationships between 
auditors or their family members and audit clients, and the scope of 
services provided by audit firms to their audit clients. The proposals 
would, among other things, significantly reduce the number of audit 
firm employees and their family members whose investments in audit 
clients are attributed to the auditor. They would also identify certain 
non-audit services that, if provided to an audit client, would impair 
an auditor's independence. The scope of services proposals would not 
extend to services provided to non-audit clients. The proposal also 
would provide a limited exception for accounting firms that have 
certain quality controls and satisfy other conditions. Finally, the 
proposals would require companies to disclose in their annual proxy 
statements certain information about, among other things, non-audit 
services provided by their auditors during the last fiscal year. The 
Commission will consider the hearing record in connection with its 
rulemaking proposals.

II. Procedures for Hearing

    After July 17, 2000, the Commission will publish a schedule of 
appearances. Based on the number of requests received, the Commission 
may not be able to accommodate all requests for the July 26 hearing. It 
also may limit the time for formal presentations or group presentations 
into a series of panels. Time will be reserved for members of the 
Commission and Commission staff to pose questions to each witness 
concerning his or her testimony as well as other matters pertaining to 
the Proposing Release. The Commission has designated Jonathan G. Katz, 
Secretary of the Commission, as the hearing officer. As noted, the 
Commission will hold additional public hearings in September. The 
Commission will issue other orders designating additional hearing 
officers as necessary.


    Dated: July 7, 2000.
    By the Commission.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-17725 Filed 7-12-00; 8:45 am]
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