[Federal Register Volume 69, Number 62 (Wednesday, March 31, 2004)]
[Notices]
[Pages 16988-16990]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-7211]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-49473; File No. PCAOB-2004-01]


Public Company Accounting Oversight Board; Notice of Filing and 
Order Granting Accelerated Approval of Proposed Amendment to 
Registration Deadline for Non-U.S. Public Accounting Firms

March 25, 2004.
    Pursuant to section 107(b) of the Sarbanes-Oxley Act of 2002 (the 
``Act''), notice is hereby given that on March 15, 2004, the Public 
Company Accounting Oversight Board (the ``Board'' or the ``PCAOB'') 
filed with the Securities and Exchange Commission (the ``Commission'') 
the proposed rule amendment described in Items I and II below, which 
items have been prepared by the Board. The Commission is publishing 
this notice to solicit comments on the proposed amendment from 
interested persons and is approving the proposal on an accelerated 
basis.

I. Board's Statement of the Terms of Substance of the Proposed Rule 
Change

    On March 9, 2004, the Board adopted a rule amending PCAOB Rule 
2100, ``Registration Requirements for Public Accounting Firms,'' to 
change the effective date of the registration requirement for foreign 
public accounting firms. The proposal changes the effective date of 
that requirement to July 19, 2004. PCAOB Rule 2100, as the Board 
proposes to amend it, is set out below. Proposed new language is in 
italics; proposed deletions are in [brackets].

Text of the Proposed Rule Change

Rules of the Board
* * * * *

[[Page 16989]]

Section 2. Registration and Reporting

Part 1--Registration of Public Accounting Firms

Rule 2100. Registration Requirements for Public Accounting Firms
    Effective October 22, 2003 (or, for foreign public accounting 
firms, [April] July 19, 2004), each public accounting firm that--
    (a) prepares or issues any audit report with respect to any issuer; 
or
    (b) plays a substantial role in the preparation or furnishing of an 
audit report with respect to any issuer

must be registered with the Board.
* * * * *

II. Board's Statement of the Purpose of, and Statutory Basis for, the 
Proposed Rule Change

    In its filing with the Commission, the Board included statements 
concerning the purpose of, and basis for, the proposed rule and 
discussed any comments it received on the proposed rule. The text of 
these statements may be examined at the places specified in Item III 
below. The Board has prepared summaries, set forth in sections A, B, 
and C below, of the most significant aspects of such statements.

A. Board's Statement of the Purpose of, and Statutory Basis for, the 
Proposed Rule Change

(a) Purpose
    As originally proposed, the Board's registration rules would 
require that, effective April 19, 2004, a foreign public accounting 
firm that prepares or issues any audit report with respect to any 
issuer, or plays a substantial role in the preparation or furnishing of 
an audit report with respect to any issuer, must be registered with the 
Board. The purpose of the proposed rule is to change the effective date 
of that requirement to July 19, 2004.
(b) Statutory Basis
    The statutory basis for the proposed rule is Title I of the Act.

B. Board's Statement on Burden on Competition

    The Board does not believe that the proposed rule will result in 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act. The proposed rule changes the 
effective date of the registration requirement for foreign public 
accounting firms to July 19, 2004.

C. Board's Statement on Comments on the Proposed Rule Change Received 
From Members, Participants or Others

    The Board released the proposed rule for public comment as part of 
a group of proposed rules related to Board oversight of foreign public 
accounting firms in PCAOB Release No. 2003-024 (December 10, 2003). A 
copy of PCAOB Release No. 2003-024 and the comment letters received in 
response to the PCAOB's request for comment are available on the 
PCAOB's Web site at http://www.pcaobus.org. The Board received 22 
written comments. While there was broad support for the Board changing 
the effective date of the registration requirement to July 19, seven 
commenters, who included accounting firms, profession-based 
organizations and a representative of a foreign government, suggested 
the Board further extend the registration deadline.
    The Board proposed the 90-day extension of the effective date of 
the registration requirement to allow non-U.S. accounting firms 
additional time to consider the Board's framework for how the Board 
would conduct its oversight of such firms, should they choose to 
register. Given that the cooperative framework was outlined in October 
of last year, the Board believes that 90 days is an adequate amount of 
time to extend the effective date of the registration requirement. As 
such, the final rule is identical to the proposed rule.

III. Commission's Finding and Order Granting Accelerated Approval of 
Proposed Rule Change

    The proposed rule change would extend the effective date of the 
registration requirement for foreign public accounting firms by 90 days 
(until July 19, 2004). This would provide additional time for foreign 
firms to prepare and submit their registration applications to the 
PCAOB before the effective date of the registration requirement.
    Under section 102(c)(1) of the Act and PCAOB Rule 2106(b), the 
Board has 45 days within which to act on a registration application; 
therefore, a prospective applicant would need to submit its application 
within 45 days of the deadline to allow the Board sufficient time to 
act on its application. Since the April 19th deadline is now less than 
45 days in the future, if a foreign firm has not already submitted an 
application for registration, the Board may not have sufficient time to 
act on that firm's application before the current deadline. If the 
proposed rule change is not given accelerated effectiveness, the rule 
change would not take effect until after the April 19th deadline, which 
would undermine the purpose of the rule change. The proposed rule 
change would help to eliminate any confusion or uncertainty relating to 
the impending effective date of the registration requirement for 
foreign public accounting firms.
    On the basis of the foregoing, the Commission finds that the 
extension is consistent with the requirements of sections 102, 106, and 
107(b) of the Act and the securities laws and is necessary and 
appropriate in the public interest and for the protection of investors.
    The Commission also finds good cause to approve the proposed rule 
change on an accelerated basis.\1\ The Commission believes that the 
proposed rule change would benefit both the PCAOB and accounting firms 
by allowing non-U.S. accounting firms additional time to consider the 
Board's framework for conducting its oversight of foreign registered 
public accounting firms and to prepare and submit their registration 
applications in sufficient time for the Board to act on their 
applications before the registration deadline. The public will benefit 
from the orderly implementation of international auditor oversight. 
Also, the proposed rule change would provide the Board with additional 
time to work with its foreign counterparts in developing cooperative 
arrangements to accomplish the goals of the Act without subjecting 
foreign firms to unnecessary burdens or conflicting requirements and 
would help to eliminate any confusion relating to the impending 
registration deadline until the firms have had an opportunity to 
consider the Board's framework. The Commission believes that it is in 
the public interest to approve the proposed rule amendment as soon as 
possible so that sufficient advance notice of the Board's extension of 
the registration deadline for non-U.S. public accounting firms may be 
provided in order to avoid unnecessary burdens on firms attempting to 
comply with the Board's original registration requirements.
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    \1\ Section 107(b)(4) of the Act states that paragraphs (1) 
through (3) of section 19(b) of the Exchange Act, with certain 
amendments, govern Commission approval of the rules of the Board. 
Section 19(b)(2) of the Exchange Act provides for the Commission to 
approve rules on an accelerated basis if ``the Commission finds good 
cause for so doing and publishes its reasons for so finding.''
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    Accordingly, the Commission believes that good cause exists, 
consistent with sections 102, 106 and 107 of the Act, and section 19(b) 
of the Exchange Act, to approve the proposed rule change on an 
accelerated basis.

[[Page 16990]]

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed 
amendment is consistent with the Act. Comments may be submitted 
electronically or by paper. Electronic comments may be submitted by: 
(1) Electronic form on the SEC Web site (http://www.sec.gov) or (2) e-
mail to [email protected]. Mail paper comments in triplicate to 
Jonathan G. Katz, Secretary, Securities and Exchange Commission, 450 
Fifth Street, NW., Washington, DC 20549-0609. All submissions should 
refer to File No. PCAOB-2004-01; this file number should be included on 
the subject line if e-mail is used. To help us process and review your 
comments more efficiently, please use only one method. The Commission 
will post all comments on the Commission's Internet Web site (http://www.sec.gov). Comments are also available for public inspection and 
copying in the Commission's Public Reference Room, 450 Fifth Street, 
NW., Washington, DC 20549. We do not edit personal identifying 
information from submissions. You should submit only information that 
you wish to make available publicly. All comments should be submitted 
on or before April 30, 2004.

IV. Conclusion

    It is therefore ordered, pursuant to sections 102, 106 and 107 of 
the Act and section 19(b)(2) of the Exchange Act that the proposed rule 
change (File No. PCAOB-2004-01) be and hereby is approved on an 
accelerated basis.

    By the Commission.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 04-7211 Filed 3-30-04; 8:45 am]
BILLING CODE 8010-01-P