[Federal Register Volume 69, Number 97 (Wednesday, May 19, 2004)]
[Notices]
[Pages 28957-28958]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-11263]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-49694; File No. PCAOB-2003-09]


Public Company Accounting Oversight Board; Order Approving 
Proposed Rule and Application Instructions Governing Withdrawal From 
Registration

    May 13, 2004.

I. Introduction

    On October 15, 2003, the Public Company Accounting Oversight Board 
(the ``Board'' or the ``PCAOB'') filed a Form 19b-4 with the Securities 
and Exchange Commission (the ``Commission'') pursuant to Sections 102 
and 107 of the Sarbanes-Oxley Act of 2002 (the ``Act''), consisting of 
a proposed rule and application form completion instructions governing 
withdrawal from registration (collectively the ``proposed rule''). 
Notice of the proposed rule was published in the Federal Register on 
April 8, 2004.\1\ The Commission received one comment letter. For the 
reasons discussed below, the Commission is granting approval of the 
proposed rule.
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    \1\ Release No. 34-49520 (April 2, 2004); 69 FR 18656 (April 8, 
2004).
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II. Description

    The Act established the PCAOB to oversee the audits of public 
companies and related matters, to protect investors, and to further the 
public interest in the preparation of informative, accurate and 
independent audit reports. The PCAOB is to accomplish these goals 
through registration, standard setting, inspections, and disciplinary 
programs.
    In furtherance of the registration requirement in Section 102 of 
the Act, the PCAOB adopted registration rules on April 23, 2003. The 
Commission approved those rules on August 1, 2003, following a public 
comment period. The registration rules do not address the process by 
which a registered public accounting firm may cancel, rescind or 
withdraw its registration with the PCAOB. Accordingly, the Board 
published a proposed registration withdrawal rule and related 
withdrawal application form completion instructions for public comment 
on July 28, 2003 (PCAOB Release No. 2003-014). The PCAOB revised the 
proposed rule in response to three letters it received during the 
comment period. The PCAOB adopted the proposed rule, as revised, and 
concurrently authorized submission of the proposed rule to the 
Commission for approval. The proposed rule was filed with the 
Commission pursuant to the requirements of Section 107(b) of the Act 
and Section 19(b) of the Securities Exchange Act of 1934 (the 
``Exchange Act'').
    The PCAOB has proposed a rule and instructions for completion of an 
application form (Form 1-WD) to govern the process by which public 
accounting firms may request leave to withdraw from registration. Under 
the proposed rule, a registered firm may seek to withdraw at any time 
by filing Form 1-WD. However, withdrawal from registration is not 
automatic. The PCAOB may order that withdrawal be delayed while the 
Board conducts a related inspection, investigation, or disciplinary 
proceeding. The PCAOB may delay a requested withdrawal for up to 18 
months, and, under the rule, that period shall automatically be 
extended to cover any period necessary to complete a disciplinary 
proceeding initiated prior to the expiration of the 18-month period.
    The proposed rule also provides that, if the PCAOB determines 
within three years of granting a request for withdrawal that the 
withdrawal application form contained a material misstatement or 
omission, the Board may void the withdrawal retroactively. The PCAOB 
wants to provide a basis for inspecting, investigating and potentially 
disciplining a registered firm that made a false or misleading 
statement in its withdrawal application. Because the PCAOB's regulatory 
authority is greatest over entities registered with the Board, the 
proposed rule provides that the registration of a suspect firm shall be 
reinstated, effective from the date of the deemed withdrawal.
    While a request for leave to withdraw is pending, the applicant may 
not

[[Page 28958]]

engage in the preparation or issuance of, or play a substantial role in 
preparing or furnishing, a public company audit report, other than to 
issue consent to the use of an audit report for a prior period. In 
addition, a firm that has filed a Form 1-WD may not publicly hold 
itself out as registered with the PCAOB without disclosing that its 
registration status is ``registered--withdrawal request pending.''
    The American Institute of Certified Public Accountants (the 
``AICPA'') submitted to the Commission a comment letter dated April 29, 
2004. The comment letter contains a restatement of the points made by 
the AICPA in a letter dated August 18, 2003 on the proposed rule 
released by the PCAOB for public comment on July 28, 2003. The PCAOB 
gave careful consideration to the comments received from the AICPA and 
two other commenters in the course of revising the proposed rule prior 
to its adoption by the Board.

III. Conclusion

    On the basis of the foregoing, the Commission finds that the 
proposed rule is consistent with the requirements of the Act and the 
securities laws and is necessary and appropriate in the public interest 
and for the protection of investors.
    It is therefore ordered, pursuant to Section 107 of the Act and 
Section 19(b)(2) of the Exchange Act, that the proposed rule (File No. 
PCAOB-2003-09) be and hereby is approved.

    By the Commission.
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. 04-11263 Filed 5-18-04; 8:45 am]
BILLING CODE 8010-01-P