Comment Letter

March 17,2006 m 8 The Honorable Christopher Cox, Chairman U.S. Securities and Exchange Commission AAI I I00 F Street, NE AMERICAN Washington, DC 20549- I070 ASSOCIATION OF INDIVIDUAL Re: File No. 265-23 INVESTORS@ . Dear Chairman Cox, The American Association of lndividual lnvestors (AAII) is a nonprofit organization representing 180,000 individual investors throughout the United States as well as internationally. Our purpose is to 625 North Michigan Avenue provide unbiased education and tools to individual investors to aid them in their investment decisions. Chicago, Illinois 6061 1-3110 (312) 280-0 170 We strongly urge the Securities and Exchange Commission (SEC) and the Public Company Accounting Fax: (3 12) 280-9883 Oversight Board (PCAOB) to reject the recommendations of the Advisory Committee on Smaller Companies (the Committee) that would exempt an estimated 80% of all public companies from the www.aaii. corn internal control provisions of Section 404 of the Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley). Sarbanes-Oxley was passed by Congress in 2002 as a means to restore investor confidence in the aftermath of the market decline and several high-profile accounting scandals.The result has been a higher level of transparency in corporate accounting, increased confidence in the financial markets, and a strengthening of investor protections. In addition, the number of errors detected in financial statements is evidence that Sarbanes-Oxley is having ...