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Notice

Public Company Accounting Oversight Board; Order Approving 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 April 28, 2004.

I. Introduction

On December 23, 2003, the Public Company Accounting Oversight Board (the “Board” or the “PCAOB”) filed with the Securities and Exchange Commission (the “Commission”) proposed rule amendments (PCAOB-2003-11) pursuant to sections 101, 103 and 107 of the Sarbanes-Oxley Act of 2002 (the “Act”), consisting of technical amendments to the PCAOB's interim standards rules. Notice of the proposed rule amendments was published in the Federal Register on March 24, 2004.[1] The Commission received no comment letters relating to the proposed rule amendments.[2] For the reasons discussed below, the Commission is granting approval of the proposed rule amendments.

II. Description

Section 103 of the Act directs the PCAOB to establish auditing and related attestation standards, quality control standards, and ethics standards to be used by registered public accounting firms in the preparation and issuance of audit reports as required by the Act or the rules of the Commission. Section 103 of the Act also authorized the PCAOB to adopt initial or transitional standards, to the extent the Board deemed necessary, and directed that any such initial or transitional standards would be separately approved by the Commission at the same time the Commission made its determination that the PCAOB was operational under section 101(d) of the Act.

Pursuant to its standards-setting authority under the Act, on April 16, 2003, the Board adopted on an initial, transitional basis five temporary rules that directed registered public accounting firms to comply with the then-existing generally accepted standards on auditing, attestation, quality control, ethics and independence (the “interim standards rules”). On November 12, 2003, the Board proposed technical amendments to its interim standards rules to reflect that, when the Board adopts a new auditing or 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a subject matter also addressed in the interim standards, the affected portion of the interim standards will be superseded or amended. Specifically, the proposed technical amendments add the phrase “to the extent not superseded or amended by the Board” to each of the Board's interim standards rules (PCAOB Start Printed Page 24200Rules 3200T, 3300T, 3400T, 3500T and 3600T).

The PCAOB adopted the proposed technical amendments to its interim standards rules on December 17, 2003, and submitted them for Commission approval on December 23, 2003. 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 Commission published the proposed amendments for public comment on March 18, 2004.

III. Discussion

The Commission received no public comments relating to the PCAOB's proposed technical amendments to its interim standards rules. Section 103 of the Act directs the PCAOB to establish auditing and related professional practice standards. Section 103 also authorized the PCAOB to adopt initial or transitional standards, subject to the approval of the Commission. Pursuant to this authority, the Board adopted five interim standards rules as its initial, transitional auditing and related professional practice standards. These interim standards rules facilitate the Board's exercise of its standards-setting authority under the Act and assist in fulfilling the Board's standards-setting obligations under the Act. The proposed technical amendments are intended to revise these interim standards rules to clarify that a registered public accounting firm, and its associated persons, should comply with the Board's interim standards rules “to the extent not superseded or amended by the Board.”

IV. Conclusion

On the basis of the foregoing, the Commission finds that the proposed technical amendments to the Board's interim standards rules are consistent with the requirements of the Act and the securities laws and are 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 amendments (File No. PCAOB-2003-11) be and hereby are approved.

Start Signature

By the Commission.

Margaret H. McFarland,

Deputy Secretary.

End Signature End Preamble

Footnotes

1.  See Rel. No. 34-49444 (March 18, 2004).

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2.  The Commission received one comment letter in response to the request for comments on the proposed technical amendments, but the letter's contents related solely to the PCAOB's Proposed Rule on Auditing Standard No. 2, An Audit of Internal Control Over Financial Reporting Performed in Conjunction with an Audit of Financial Statements (Rel. No. 34-49544; File No. PCAOB-2004-03).

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[FR Doc. 04-9976 Filed 4-30-04; 8:45 am]

BILLING CODE 8010-01-P