SECURITY EQUITY FUND
FILE NO. 811-1136
CIK NO. 0000088525


EXHIBIT 77B:  Accountant's report on internal control

                         Report of Independent Auditors

The Shareholders and Board of Directors
Security Equity Fund

In planning and  performing  our audit of the  financial  statements of Security
Equity Fund for the year ended  September 30, 2001,  we considered  its internal
control,  including control activities for safeguarding securities,  in order to
determine our auditing  procedures  for the purpose of expressing our opinion on
the financial  statements and to comply with the requirements of Form N-SAR, not
to provide assurance on internal control.

The  management of Security  Equity Fund is  responsible  for  establishing  and
maintaining internal control. In fulfilling this  responsibility,  estimates and
judgments by management are required to assess the expected benefits and related
costs of internal controls. Generally, internal controls that are relevant to an
audit pertain to the entity's  objective of preparing  financial  statements for
external  purposes  that are fairly  presented  in  conformity  with  accounting
principles  generally accepted in the United States.  Those controls include the
safeguarding of assets against unauthorized acquisition, use, or disposition.

Because of inherent  limitations in internal  control,  error or fraud may occur
and not be detected.  Also,  projection of any evaluation of internal control to
future periods is subject to the risk that it may become  inadequate  because of
changes in conditions or that the  effectiveness of the design and operation may
deteriorate.

Our consideration of internal control would not necessarily disclose all matters
in  internal   control  that  might  be  material   weaknesses  under  standards
established  by the  American  Institute  of  Certified  Public  Accountants.  A
material weakness is a condition in which the design or operation of one or more
of the specific internal control  components does not reduce to a relatively low
level the risk that misstatements caused by error or fraud in amounts that would
be material in relation to the financial  statements being audited may occur and
not be detected  within a timely  period by  employees  in the normal  course of
performing  their assigned  functions.  However,  we noted no matters  involving
internal  control  and  its  operation,   including  controls  for  safeguarding
securities,  that we consider to be material  weaknesses  as defined above as of
September 30, 2001.

This report is intended solely for the  information  and use of management,  the
Board of Directors  of Security  Equity Fund,  and the  Securities  and Exchange
Commission and is not intended to be and should not be used by anyone other than
these specified parties.

Kansas City, Missouri
November 2, 2001