Press Release Wednesday, November 15, 2000

Contact: Frank Torres/David Butler 202/462-6262 Consumers Union's Washington, DC Office

WASHINGTON, D.C. -- The Securities and Exchange Commission (SEC) has reportedly agreed to a compromise with the accounting industry over a proposed auditor independence rule.

The SEC rule is intended to address potential areas of conflicts of interest that could arise when a major accounting firm is both selling services to a company and auditing its books.

According to press reports, the compromise rule will still impose more restrictions on the services that auditors can offer, but it will not include a SEC proposal to ban accountants from selling information technology services to their audit clients.

Frank Torres, Legislative Counsel for Consumers Union, made the following statement today regarding the SEC's compromise:

"It's disappointing that the accounting industry appears to have watered down what was originally a very strong and appropriate rule. Nonetheless, there are reportedly still several provisions to this rule that Consumers Union believes will help avoid potential conflicts of interest. Auditors cannot be independent watchdogs if they are being paid to give advice to the same company they are supposed to be auditing."

Consumers Union, publisher of Consumer Reports magazine, is an independent, nonprofit testing and information-gathering organization, serving only the consumer. We are a comprehensive source of unbiased advice about products and services, personal finance, health, nutrition, and other consumer concerns. Since 1936, our mission has been to test products, inform the public, and protect consumers. Consumers Union is located online at www.consumersunion.org

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