The additional hearing will take place on Sept. 21, one day after the planned Sept. 20 hearing to be held in the Commission's headquarters in Washington D.C.

SEC's decision to hold the extra hearing was sparked when KPMG chairman Stephen Butler backed out of Wednesday's hearing in New York City due to time constraints. Despite his absence, Butler's written testimony was submitted to the Commission.

In Butler's testimony he wrote, "I must conclude there is no compelling reason for the Commission's proposal." He goes on to list three major concerns with the proposal: "It will constitute a huge setback in our ability to attract and retain the best and brightest professionals; it will severely inhibit our ability to create the next generation of products and solutions that our clients will need - and that the profession will require - to stay on top of dramatic changes in business; and it will gradually degrade the profession's ability to produce high-quality independent audits for the 21st Century, by choking off the profession's access to the best people, ideas, products, processes and technologies."

Butler wasn't the only business leader miffed by the 15 to 30 minute time slots alloted to each testifier. Representatives from the American Institute of CPAs, who oppose the proposal, were forced to trim their testimonies, but were told by SEC chairman Arthur Levitt that they will have an opportunity to further testify at the Sept. 21 hearing.

AICPA chairman Robert Elliot said he found the hearing to be "useful," but added, "I wish we could have had more time to make our case. But I think it is favorable that the Commission has set (the additional hearing)."

If passed, SEC's proposal would dramatically change the accounting industry, modernizing the rules for auditor independence primarily in three areas: investments by auditors or their family members in audit clients; employment relationships between auditors or their family members and audit clients; and the scope of services provided by the audit firms to their audit clients. The SEC has allowed 75 days for comments and testimonies, a time frame considered much too short by many in the profession.

-- By Antoinette Alexander

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