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GAO-03-464R 1 (2003-02-19)

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       Accountability * Integrity * Reliability
United States General Accounting Office
Washington, DC 20548

          B-291942



          February 19, 2003

          The Honorable Richard C. Shelby
          Chairman
          The Honorable Paul S. Sarbanes
          Ranking Minority Member
          Committee on Banking, Housing, and Urban Affairs
          United States Senate

          The Honorable Michael G. Oxley
          Chairman
          The Honorable Barney Frank
          Ranking Minority Member
          Committee on Financial Services
          House of Representatives

          Subject: Securities and Exchange Commission: Strengthening the Commission '
                  Requirements Regarding Auditor Independence

          Pursuant to section 801(a)(2)(A) of title 5, United States Code, this is our report on a
          major rule promulgated by the Securities and Exchange Commission (SEC), entitled
          Strengthening the Commission's Requirements Regarding Auditor Independence
          (RIN: 3235-AI73). We received the rule on January 29, 2003. It was published in the
          Federal Register as a final rule on February 5, 2003. 68 Fed. Reg. 6006.

          The final rule amends the SEC's requirements regarding auditor independence to
          enhance the independence of accountants that audit and review financial statements
          and prepare attestation reports filed with the SEC. The final rule implements section
          208 of the Sarbanes-Oxley Act of 2002 (Pub. L. 107-204).

          Enclosed is our assessment of the SEC's compliance with the procedural steps
          required by section 801(a)(1)(B)(i) through (iv) of title 5 with respect to the rule.
          Our review indicates that the SEC complied with the applicable requirements.

          If you have any questions about this report, please contact James W. Vickers,
          Assistant General Counsel, at (202) 512-8210. The official responsible for GAO
          evaluation work relating to the subject matter of the rule is Thomas McCool,


GAO-03-464R

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