Date:    05/03/2000 4:53 PM
     
     
Jonathan G. Katz, Secretary
Securities and Exchange Commission
450-5th Street NW
Washington, D.C. 20549-0609
     
5/3/00
     
RE: File No. S7-04-00, Concept Release on International Accounting Standards
     
Dear Mr. Katz:
     
As the editor of one of the earliest and most comprehensive Internet 
sites on corporate governance (at http://www.Corpgov.Net) and as an 
investor, I share your concern that accounting and disclosure 
standards meet a single international standard. For example, I have 
just returned from a trip to Korea and Japan where I discussed the 
need for transparency in corporate governance in order to attract 
international capital. In addition, I believe the ideal would be to 
try not to impose US GAAP.
     
However, protecting investors is more important than obtaining some 
theoretical ideal in an effort to make cross-listing more convenient 
for foreign companies.  International Accounting Standards are not of 
sufficiently high quality or comprehensiveness to afford investors 
with a level of non-financial information disclosure (e.g. corporate 
governance, social and environmental data) comparable to that 
demanded of domestic companies under U.S. Generally Accepted 
Accounting Practices (US GAAP).
     
US GAAP requires more transparency with regard to corporate 
governance issues such as information on board members, related party 
transactions and executive compensation.  It is difficult enough to 
obtain this information under US GAAP, impossible under IASC 
guidelines.
     
Investors increasingly look to "soft " information as a key indicator 
of corporate value.  For example, a 1999 Earnst & Young survey of 
large institutional investors, with $1 billion or more in assets, 
found that 30-40% of portfolio allocation decisions are based on 
non-financial information, such as how a company treats its employees 
and the strength of its corporate culture as demonstrated by 
indicators such as environmental and social policies. The SEC should 
not allow the disclosure of non-financial information to be 
compromised in its effort to achieve international harmony.
     
By considering adoption of vague IASC and IOSCO corporate governance 
and environmental guidelines, the SEC is taking a step backwards in 
investor protection, when it should be broadening and deepening 
disclosure requirements for non-financial data.  As a user of 
SEC-mandated corporate information, I call on the Commission to 
directly reference U.S. GAAP for non-financial information in future 
foreign issuer rules, and provide for greater disclosure, guidance 
and enforcement of non-financial information for both domestic as 
well as foreign companies.
     
Thank you for the opportunity to comment on the concept release. 
Please do not hesitate to contact me at jm@corpgov.net if you have 
any questions or would like to discuss the above comments.
     
Sincerely,
     
James McRitchie, Editor
Corporate Governance
2461 Second Avenue
Sacramento, CA 95818