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Notice

Public Company Accounting Oversight Board; Notice of Filing of Proposed Technical Amendments to Interim Standards Rules

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Information about this document as published in the Federal Register.

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Start Preamble March 18, 2004.

Pursuant to section 107(b) of the Sarbanes-Oxley Act of 2002 (the “Act”), Start Printed Page 13918notice is hereby given that on December 23, 2003, the Public Company Accounting Oversight Board (the “Board” or the “PCAOB”) filed with the Securities and Exchange Commission (the “Commission”) the proposed rule amendments 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 amendments from interested persons.

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

On December 17, 2003, the Board adopted technical amendments to interim standards rules. The portions of the rules that the Board has amended are set out below. Proposed new language is in italics; proposed deletions are in [brackets].

Text of the Proposed Rule Changes

Rules of the Board

* * * * *

Section 3. Professional Standards

Part 1—General Requirements

* * * * *

Rule 3200T. Interim Auditing Standards

In connection with the preparation or issuance of any audit report, a registered public accounting firm, and its associated persons, shall comply with generally accepted auditing standards, as described in the AICPA Auditing Standards Board's Statement of Auditing Standards No. 95, as in existence on April 16, 2003 (Codification of Statements on Auditing Standards, AU § 150 (AICPA 2002)) , to the extent not superseded or amended by the Board.

* * * * *

Rule 3300T. Interim Attestation Standards

In connection with an engagement (i) described in the AICPA's Auditing Standards Board's Statement on Standards for Attestation Engagements No. 10 (Codification of Statements on Auditing Standards, AT § 101.01 (AICPA 2002)) and (ii) related to the preparation or issuance of audit reports for issuers, a registered public accounting firm, and its associated persons, shall comply with the AICPA Auditing Standards Board's Statements on Standards for Attestation Engagements, and related interpretations and Statements of Position, as in existence on April 16, 2003 , to the extent not superseded or amended by the Board.

* * * * *

Rule 3400T. Interim Quality Control Standards

A registered public accounting firm, and its associated persons, shall comply with quality control standards, as described in—

(a) the AICPA's Auditing Standards Board's Statements on Quality Control Standards, as in existence on April 16, 2003 (AICPA Professional Standards, QC §§ 20-40 (AICPA 2002)) , to the extent not superseded or amended by the Board; and

(b) the AICPA SEC Practice Section's Requirements of Membership (d), (f)(first sentence), (l), (m), (n)(1) and (o), as in existence on April 16, 2003 (AICPA SEC Practice Section Manual § 1000.08(d), (f), (j), (m), (n)(1) and (o)) , to the extent not superseded or amended by the Board.

* * * * *

Rule 3500T. Interim Ethics Standards

In connection with the preparation or issuance of any audit report, a registered public accounting firm, and its associated persons, shall comply with ethics standards, as described in the AICPA's Code of Professional Conduct Rule 102, and interpretations and rulings thereunder, as in existence on April 16, 2003 (AICPA Professional Standards, ET §§ 102 and 191 (AICPA 2002)) , to the extent not superseded or amended by the Board.

* * * * *

Rule 3600T. Interim Independence Standards

In connection with the preparation or issuance of any audit report, a registered public accounting firm, and its associated persons, shall comply with independence standards—

(a) [(1)] as described in the AICPA's Code of Professional Conduct Rule 101, and interpretations and rulings thereunder, as in existence on April 16, 2003 (AICPA Professional Standards, ET §§ 101 and 191 (AICPA 2002)) , to the extent not superseded or amended by the Board; and

(b) [(2)] Standards Nos. 1, 2, and 3, and Interpretations 99-1, 00-1, and 00-2, of the Independence Standards Board , to the extent not superseded or amended by the Board.

* * * * *

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

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 IV 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 Changes

(a) Purpose

On April 16, 2003, the Board adopted on an initial, transitional basis five temporary rules that refer to existing professional standards of auditing, attestation, quality control, ethics, and independence (known collectively as interim standards). These rules were approved by the Securities and Exchange Commission on April 25, 2003. (See SEC Rel. No. 33-8222). This proposal reflects that when the Board adopts a new auditing and related professional practice standard that addresses a subject matter also addressed in the interim standards, the affected portion of the interim standards will be superseded or amended. Therefore, the Board has approved adding the phrase “to the extent not superseded or amended by the Board” to each of the interim standards (PCAOB Rules 3200T, 3300T, 3400T, 3500T, and 3600T). In addition, the Board adopted a technical amendment to Rule 3600T, revising the numbering of the paragraphs from “(1)” and “(2)” to “(a)” and “(b)”.

(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 reflects that when the Board adopts a new auditing and related professional practice standard that addresses a subject matter that also is addressed in the interim standards, then the affected portion of the interim standards will be superseded or amended.

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

The Board released the proposed rule for public comment in PCAOB Release No. 2003-022 (November 12, 2003). A copy of PCAOB Release No. 2003-022 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 six written comments. Most of the commenters Start Printed Page 13919explicitly indicated support for the technical amendments to the interim standards rules, and none indicated opposition to the technical amendments. Thus, the Board made no modifications to this proposed rule.

In addition, many commenters requested that the Board identify how proposed, as well as final, standards affect the existing interim standards. While it may not always be practicable to identify exactly which portions of existing standards have been superseded or amended by new Board standards, the Board recognizes the need to provide auditors with as much guidance and clarity as possible. As future standards are adopted or amended, the Board intends to identify, to the greatest extent possible, those interim standards that are amended or superseded by standards issued by the Board.

III. Date of Effectiveness of the Proposed Rule Changes and Timing for Commission Action

Within 35 days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the Board consents the Commission will:

(a) by order approve such proposed rule changes; or

(b) institute proceedings to determine whether the proposed rule changes should be disapproved.

IV. Solicitation of Comments

Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule changes are 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 rule-comments@sec.gov. 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-2003-11; 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 14, 2004.

Start Signature

By the Commission.

J. Lynn Taylor,

Assistant Secretary.

End Signature End Preamble

[FR Doc. 04-6591 Filed 3-23-04; 8:45 am]

BILLING CODE 8010-01-P