SEC chairman Arthur Levitt.

"Intervention in the Commission's customary regulatory processes would set an unfortunate precedent that could undermine the SEC's ability to carry out the mission Congress entrusted it to achieve," Levitt wrote.

The letter, which was sent late Monday, was addressed to House and Senate leadership, members of the House and Senate Appropriations Committees, members of the Senate Banking Committee and members of the House Commerce Committee.

In addition, Levitt testified before the Senate Banking Committee's Subcommittee on Securities last month. In his testimony, Levitt restated the need to modernize the auditor independence rules and addressed concerns sparked by the proposal.

An increase in lucrative consulting engagements with audit clients prompted the SEC to propose new rules for auditor independence, limiting the services provided by the audit firms to their audit clients. The Commission has held four public hearings and collected about 3,000 comment letters on the matter.

The proposal ignited concern among many in the profession, including the American Institute of CPAs and three of the Big Five firms -- Arthur Andersen, KPMG and Deloitte & Touche. Opponents fear the proposal, if approved, will decay audit quality and prevent firms from attracting talent.

Breaking the ranks of the Big Five, PricewaterhouseCoopers and Ernst & Young submitted a proposal of their own last month, which called for limiting the services provided by audit firms to their audit clients.

In reference to the PwC/E&Y proposal, Levitt wrote, "I regard their submission as constructive and thoughtful and one that I expect will affect the Commission's thinking as it moves towards consideration of a final rule. As with all the Commission's rulemakings, the final rule will reflect the important comments and ideas of the public."

Levitt added, "In recent days, we have been meeting with members of the other Big Five firms to listen and exchange views about our rule proposal. These discussions have been productive, and I believe that we will continue to make progress as long as we all stay at the table."
    
"I ask, however, that regardless of what happens, you will do what you can to ensure that the voice of the Commission -- a voice that speaks solely and consistently in the protection of the public interest -- is not silenced," Levitt wrote.

-- By Antoinette Alexander

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