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Thank you Chairman McDonough for being with us today to discuss the Public Company Accounting Oversight Board's (PCAOB) implementation of the Sarbanes-Oxley Act.

Mr. Chairman, I am very much looking forward to hearing your testimony this morning. I know that you and your staff have accomplished a great deal in a very short period of time. Last week, Chairman Donaldson of the SEC testified that the primary rule writing phase of the SEC is virtually complete and that now the primary focus of rule writing and implementation of the law will be on the Public Company Accounting Oversight Board.

While the Sarbanes-Oxley Act established a new regulatory oversight body for the auditing industry with registration and enforcement authority, I believe that the single most important mission for the Public Company Accounting Oversight Board is establishing the auditing standards for the industry. The future of our securities markets are dependent on how these standards are developed, how they are implemented by the PCAOB, and how the auditing firms put them to use.

It is my understanding that the PCAOB intends to work in an open process with a broad cross-section of the accounting, financial, and investing communities to develop these standards. I applaud you for that.

Another area of concern for me is the ability of small auditors to stay in the business of conducting audits for small, publicly traded company. One key question on the passage of the Sarbanes-Oxley Act was whether the small auditing community would be able to weather the increased regulatory climate and the increased administrative requirements. The recent GAO study on consolidation in the accounting industry was inconclusive on this, however, it may be that the study was too premature to capture the full effect of the law on the industry.

The survival of small auditors is important not only for the community but also for the small companies that strive to reach the public markets. Chairman McDonough, I know that you have been a strong supporter of the small auditor and I look forward to hearing how the PCAOB is working with small auditing industry.

Personally, I would like to thank Chairman McDonough for taking such quick and firm control of the reins as Chairman of the PCAOB and for working with the Congress to ensure the implementation of the provisions of the Sarbanes-Oxley Act is done with investor respect and confidence in mind.

Thank you, Chairman Shelby.