From: Mike Liles, Jr. [MLiles@karrtuttle.com]
Sent: Tuesday, February 25, 2003 7:18 PM
To: rule-comments@sec.gov
Subject: File No. S7-40-02

KARR TUTTLE CAMPBELL
1201 Third Avenue, Suite 2900
Seattle, Washington 98101
(206) 223-1313

Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20540-0609

Re: Proposed Rule: Disclosure Required by Sections 404, 406 and 407 of the 
Sarbanes-Oxley Act of 2002 (Release Nos. 33-8138; 34-46701; IC-25775)

Ladies and Gentlemen:

We submit the following comment concerning the above proposal on behalf of 
this law firm and not on behalf of any committee of  any bar association in 
which any member of this firm, including the undersigned, holds a position.

Our comment relates solely to the attestation to, and report on, management's 
internal control report by the company's auditor.  The last sentence of 
Section 404(b) of the Sarbanes-Oxley Act of 2002 states that "Any such 
attestation shall not be the subject of a separate engagement."  The purpose 
of this sentence is not apparent, and it is possible to infer therefrom that 
Congress has mandated that auditors should not make any additional charge for 
this attestation service.  Such an interpretation is not realistic, as the 
work that a prudent auditor would undertake in connection with an attestation 
that would be referenced in an annual report under the Exchange Act might be 
significant, depending upon the circumstances.  Public policy would best be 
served if an auditor could approach such an attestation with the knowledge 
that if for any reason it should need to pursue in depth some underlying aspect 
of its attestation, it would be able to be appropriately compensated for its 
effort.  The more problematical any particular management's internal control 
report might be, the greater need to encourage the auditor to be thorough in 
its procedures, and any restriction on the auditor's compensation under those 
circumstances would seem counterproductive to the fundamental purposes underlying 
Section 404(b).

Our review has turned up nothing in the Report dated April 22, 2020 by the 
House Committee on Financial Services, the Conference Report dated July 24, 
2002 or the above proposed Rule of the Commission that provides insight on 
this particular point.  

We therefore respectfully encourage the Commission in its release adopting the 
final version of the proposed Rule to make clear that the language of the Act 
that "such attestation shall not be the subject of a separate engagement" is not 
to be construed to mean that auditors may not separately charge a fee for the a
ttestation services that is reasonable under the circumstances.

Very truly yours,
Karr Tuttle Campbell

Mike Liles, Jr.
(206) 224-8068

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