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Board Proposes New Ethics and Independence Rule Concerning Communications with Audit Committees and an Amendment To its Existing Tax Services Rule And Adjusts Implementation Schedule for Tax Services Rule

Washington, DC, July 24, 2007 – The Public Company Accounting Oversight Board today proposed for public comment new ethics and independence Rule 3526, Communication with Audit Committees Concerning Independence, that would supersede the Board's interim independence requirement, Independence Standards Board Standard No. 1, Independence Discussions with Audit Committees, and two related interpretations. The proposed rule would require a registered public accounting firm to communicate to an issuer's audit committee about any relationships between the firm and the issuer that may reasonably be thought to bear on the firm's independence. The communications would be required both before the firm accepts a new engagement pursuant to the standards of the PCAOB and annually for continuing engagements.

In addition, the Board proposed an amendment to Rule 3523, Tax Services for Persons in Financial Reporting Oversight Roles, that would exclude from the scope of the rule the portion of the audit period that precedes the beginning of the professional engagement period. The proposal follows the Board’s April 3, 2007 concept release, which solicited comment about the possible effects on a firm's independence of providing tax services to a person covered by Rule 3523 during the portion of the audit period that precedes the beginning of the professional engagement period and other practical consequences of applying the restrictions imposed by Rule 3523 to that portion of the audit period.

The Board is seeking comment for a 45-day period, ending on September 7, 2007, on the proposed amendment to Rule 3523, Tax Services for Person in Financial Reporting Oversight Roles, and proposed rule 3526, Communication with Audit Committees Concerning Independence.

The Board adjusted the implementation schedule for Rule 3523 as it applies to tax services provided during the audit period to allow sufficient time for consideration of comments on the proposed amendment. Specifically, the Board will not apply Rule 3523 to tax services provided on or before April 30, 2008, when those services are provided during the audit period and are completed before the professional engagement period begins.

The text of the proposed new ethics and independence rule and proposed amendment to Rule 3523 are available on the Board’s Web site.

An archive of the Webcast and a podcast of the Board’s public meeting will also be available on the Board's Web site at www.pcaobus.org.

The release and proposed rules are available on the Board’s Web site under Rulemaking Docket 017.

Media Inquiries: Public Affairs, 202-207-9227

The PCAOB is a private-sector, nonprofit corporation, created by the Sarbanes-Oxley Act of 2002, to oversee the auditors of public companies in order to protect the interests of investors and further the public interest in the preparation of informative, fair, and independent audit reports.