SEC Chief Accountant Letter to ASB and SEC Practice Section on Interim Financial Statement Reviews

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October 6, 2000 James S. Gerson Chair, Auditing Standards Board PricewaterhouseCoopers LLP 500 Campus Drive P.O. Box 805 Florham Park, New Jersey 07932 And Michael A. Conway Chair, SEC Practice Section KPMG Peat Marwick LLP 280 Park Avenue, 8 th Floor New York, New York 10017 Dear Mr. Gerson & Mr. Conway: With the support of the accounting profession, the Commission adopted new rules in 1999 requiring timely reviews of interim financial statements by a registrant's independent public accountant. The staff believes that the involvement of auditors with interim financial statements can facilitate earlier identification and resolution of issues that can affect the quality of financial reporting to investors. I have just read the Professional Issues Task Force Practice Alert 2000-4, Quality Review Procedures for Public Companies. I believe Practice Alert 2000-4 does an excellent job of educating auditors about their responsibilities for, and how to improve, quarterly reviews. I encourage all auditors to embrace this guidance, especially in light of the current focus on timely financial reporting. I further encourage the Auditing Standards Board to commence a project to review SAS 71 with the goal of including in authoritative literature much of the guidance from Practice Alert 2000-4. I also recommend that the SECPS consider adopting a requirement that the concurring review partner assigned to the annual audit of a company's financial statements also be involved in the quarterly reviews. The continuous audit concept supports the timely involvement of the concurring partner in quarterly reviews and contemporaneous awareness by the concurring partner of issues raised concerning the audit client's situation throughout the year. If you have any questions, please contact Michael Kigin or John Morrissey from the staff at 202-942-4400. Sincerely, Lynn E. Turner Chief Accountant CC: Charles Bowsher, Chairman - Public Oversight Board John Weber, Senior Technical Manager - AICPA Staff

http://www.sec.gov/info/accountants/staffletters/asbsps100600.htm

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Modified: 07/10/2001