Eugene D. O'Kelly
Chairman & Chief Executive
KPMG LLP
345 Park Avenue
New York, NY 10154

Dear Mr. O'Kelly:

Thank you for sending me a copy of the letter that KPMG LLP provided to its clients on August 26, 2004, containing a summary of the nonpublic section of the recent Public Company Accounting Oversight Board ("PCAOB") Report on its 2003 Limited Inspection of KPMG. I appreciate and commend KPMG's efforts to provide added transparency to the PCAOB inspection process.

In that letter, however, the firm made a statement, which apparently is attributed to me, that is inaccurate. The letter states that "assuming the AICPA rules for contingent fee arrangements had been complied with and the audit committee agreed that our independence had not been impaired, the SEC would not challenge our independence." I made no such statement. Furthermore, the Commission has not made a decision regarding its position on these matters in respect of auditing firms.

I expect that you will convey the substance of this letter to your clients and correct any misunderstanding or misperception resulting from your statement.

Thank you.

http://www.sec.gov/info/accountants/staffletters/kpmg09152004.htm