Securities and Exchange Commission
       American Institute of Certified Public Accountants


                    NEWS RELEASE                           97-41

For Immediate Release    Contacts:  SEC-Chris Ullman 202.942.0020
May 21 1997                         AICPA-Lynn Drake 202.434.9214


          SEC AND AICPA ANNOUNCE THE CREATION OF A NEW
                  INDEPENDENCE STANDARDS BOARD

(Washington, DC) The Securities and Exchange Commission (SEC) and
the American Institute of Certified Public Accountants (AICPA)
jointly announced today the creation by the accounting profession
of a new private-sector body to establish independence standards
for the auditors of public companies. The new organization, to be
called the Independence Standards Board (ISB) and created within
the AICPA, will include both public members and practicing
certified public accountants.

Chancellor William Allen of the Delaware Court of Chancery has
agreed to serve as the Board's first Chairman upon expiration of
his current term on the Court at the end of June. The remaining
members of the Board will be announced in the next few weeks.

The new Board is being created in response to the increasing
challenge of addressing independence issues as auditors have
entered into new service areas, auditing firms have merged and
restructured their operations, and business and professional
relationships have become more complex. In this changing
environment, many of the Commission's independence regulations,
written years ago, no longer provide obvious guidance. The SEC
will look to the new Board to address these issues and develop
and maintain a body of independence standards that will preserve
and enhance the independence of auditors of public companies.

"Independence is the soul of the public accounting profession,
and today we take a decisive step to ensure that it remains so,"
said Arthur Levitt, Chairman of the SEC. "By having the
Independence Standards Board take the initiative in preserving
auditor independence, we harness the resources and expertise of
the private sector to address a difficult challenge without new
regulation or legislation. l commend the AICPA for its initiative
and for the commitment to professionalism that the creation of
the new body demonstrates."

"This important and far-reaching proposal will serve investors
for decades to come," said Barry Melancon, AICPA President and
CEO. "For the profession, it is an extension of our ongoing
commitment to protecting and serving the public interest while
maintaining the strength of our profession's hallmark --
independence. We applaud Chairman Levitt and his staff for their
foresight and leadership."


Commissioner Steven Wallman, who has encouraged updating the
existing framework for independence rules, expressed support for
the new entity, noting "the new board -- with fresh insights and
judgments -- undertakes the tremendously important task of
evaluating how to revise the current rules to ensure auditor
independence and effectiveness and maintain public confidence in
the integrity of the auditing process."


Commissioner Isaac Hunt, who has been active in addressing
auditor independence issues, congratulated the profession for
taking this important step to preserve investor confidence in
independent audits of public companies. "Our goal is to forge an
effective public-private sector partnership that serves and
protects the public interest, while placing a minimal burden on
government resources."


While the Commission retains its authority regarding auditor
independence and will oversee the operations of the ISB, both the
AICPA and the SEC share the view that this new public-private
sector partnership, with an open, active standard-setting body
and full opportunity for public participation, will strengthen
independence standards and protect and promote investor
confidence in the securities markets.


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                      Facts about the ISB:

The eight-member Board will be comprised equally of public
members (from which the ISB chairman will be elected) and
practicing certified public accountants. Public members will be
prominent individuals of high integrity and reputation, who
understand the importance of investor protection, the U.S.
capital markets and the accounting profession.

The ISB will take the lead in establishing, maintaining and
improving auditor independence requirements for SEC registrants.

The Commission's existing authority regarding auditor independence
remains intact. This includes the Commission's authority to institute
such enforcement actions as it deems appropriate.

Standard-setting meetings will be open to the public and proposed
standards will be exposed for public comment before they are issued.

The SEC expects to recognize the ISB as the private sector body
responsible for establishing independence standards and interpretations
for auditors of public entities and will consider principles,
standards, interpretations and practices issued by the ISB as having
substantial authoritative support.

The Board will be assisted by a nine-member Independence Issues
Committee (IIC) that will help with the timely identification and
discussion of emerging independence issues within the framework of
existing authoritative literature. This committee will be comprised of
CPAs drawn from firms that audit SEC registrants.

The AICPA will provide the funding for the Board, its executive
director position and staff. The ISB will be created within the AICPA.

After a five-year period, the Commission and the AICPA will review the
operations of the ISB to evaluate whether this new independence
framework continues to serve the public interest and protect investors.

The AICPA (www.aicpa.org) is the national professional organization of
CPAs with more than 331,000 members in public practice, business and
industry, government and education.

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