Disclosure issues that have plagued

PricewaterhouseCoopers

are forcing

Fidelity

to resubmit a routine proxy vote to shareholders and send out 2 million new ballots.

Shareholders of four Fidelity funds are being asked to recast votes on whether to retain PricewaterhouseCoopers as their auditor. The new vote comes after PwC revealed that a manager in its Boston office held shares in the Fidelity

(FPURX) - Get Report

Puritan fund, a fact that wasn't disclosed in proxy materials sent in May to shareholders.

The

Securities and Exchange Commission

requires that any professional at a public accounting firm providing any service to a client can't own a significant amount of stock in the client's company, or in this case, the mutual fund. In addition, any manager in the office conducting the audit can't own the company's stock or mutual fund shares. PwC's Boston office audits the Puritan fund.

The manager has since sold his Puritan shares, and never provided services to the funds, according to a revised proxy statement filed with the SEC. PwC wouldn't identify the manager.

Three other funds at Fidelity are run under the Puritan Trust:

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Balanced fund,

(FGBLX)

Global Balanced fund and

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Low-Priced Stock.

Other PwC professionals held shares in Balanced and Low-Priced Stock, the filing says. And since an independent accountant is selected for all funds in the trust, shareholders of all four funds are being asked to vote again.

A new vote "is not something we do frequently because this doesn't happen frequently," says Eric D. Roiter, general counsel for

FMR

, Fidelity's investment management arm. "We didn't want to prejudge the matter for our shareholders."

Since the original proxy stated PwC employees didn't have any investments inconsistent with independence standards, Fidelity wanted shareholders to know that statement wasn't technically accurate, says Roiter.

Roiter said he could not address who will pay for the second proxy vote. Usually, such costs are added to a fund's operating expenses.

"We feel that cost really isn't the concern here," Roiter says. "It's to make sure the shareholders get the correct information."

A PwC spokesman said the company could not comment on matters involving clients.

PwC had recently

toughened its policy on employee investments as a result of SEC scrutiny of practices in its Tampa, Fla., office. Since then, the company has been on a crusade to make sure it doesn't end up in the same situation again. It extended investment restrictions that previously applied only to partners to about 10,000 managers, though those restrictions were loosened somewhat this week in response to employee complaints.

PwC's compliance team has kicked into full gear lately, says one manager, who asked not to be named. "They've gotten screwed once and it's not going to happen again," he says. Accordingly, PwC's compliance team is doing spot audits of employees' holdings.

The manager questioned whether such stringent compliance is needed in the case of a mutual fund. "We're nothing to them," he says. "SEC rules are sort of arcane because they assume the accounting firms have influence."

But FMR's Roiter says his firm is sensitive to the SEC's heightened interest in issue of auditors' independence.

"We take that seriously and PwC takes it seriously," says Roiter. "I think

SEC Chairman

Arthur Levitt is trying to sensitize the accounting profession on these issues. And as accounting firms get larger and larger, there's a commensurate need to ensure you've got your procedures in place to comply with these independent standards."

Shareholders of the affected Fidelity funds are not required to return the ballot for the new vote, scheduled for Aug. 6.

In its revised filing, Fidelity explains, "if you would like to change your vote after reading this information, you may do so. If you do not wish to vote again, there is no need to take any action."