Comments on Proposed Rule:
Auditor Independence Requirements

Release Nos. 33-7870; 34-42994; 35-27193; IC-24549; IA-1884; File No. S7-13-00

Author:  Dawn Badgley  at Internet
Date:    09/10/2000  7:52 PM
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TO: RULE-COMMENTS at 03SEC
Subject: "File No.S7-13-00"
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SEC Chairman Arthur Levitt and the Securities and Exchange Commission re 
File No. S7-13-00:
     
As an amateur investor and a professional real estate broker, the answer 
to independent auditors does not seem so difficult to me.
     
Several years ago "undisclosed dual agency" was met by certain people in 
the real estate industry with the same resistance as  CPA's resisting 
"auditor independence".  My personal experience has been that the 
regulation protecting buyers has been good for everyone and, in fact, may 
even have increased sales because people feel less trapped and 
manipulated by a system that works contrary to trust.
     
I would like to encourage the members of the Commission to require 
accounting and consulting services of companies to be performed by 
separate and independent accounting firms.
     
I applaud your attention to this matter and praise the courage of those 
such as John Bogle of The Vanguard Group for taking an aggressive public 
stand on this issue.
     
Thank you for reading my viewpoint.
     
Sincerely,
     
Dawn Badgley@home.com

Author:  "Kurt W. Baumgartner"  at Internet
Date:    09/10/2000  9:27 AM
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TO: RULE-COMMENTS at 03SEC
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Dear sir(s):
     
I am inclined to agree with Mr. Bogle on the issue of Auditor Independence, 
and side with the SEC to review  Auditor Independence as a high priority.
     
Keeping audits separate from consulting services can only assist 
shareholders' security and the company's they own.
     
Kurt W. Baumgartner
     
"I must be cruel so as to be kind,
so that less bad begins and more remains behind."
             - 'Liam "Bill" Spear-Shaker something or another'
     

     

Author:   at Internet
Date:    09/10/2000  12:35 PM
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TO: RULE-COMMENTS at 03SEC
Subject: File Number S7-13-00
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I am not a member of a Big Ten accounting firm. I don't even know anyone 
who is. But I do have a modest amount of money invested, and I would like 
to continue to do so in the future. Understanding the subtle workings and 
shadings of a financial statement is a tiring task for me, and I work hard 
to conquer its meaning. But over time I have gained a reasonable amount of 
understanding with the shifts and movements seen in a company's quarterly 
and annual statements. Without a basic confidence in the accuracy of these 
tools I have available, any investment decision I would be able to make 
would be more like a lottery bet than a financial decision.
     
For this reason I support the SEC and its current review of audit practices 
and possible conflicts of interests surrounding the companies that perform 
them. I know that the SEC is stepping on some very big financial toes. But 
the SEC is the only group that I can depend on to keep the playing field 
level for me and other individual investors. Without that I'd be forced 
into less attractive investment instruments. In the long run this would not 
be good for the investment community or the United States economy as a 
whole.
     
Marcus Bell

Author:  "Chuck Berry"  at Internet
Date:    09/10/2000  7:22 PM
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TO: RULE-COMMENTS at 03SEC
Subject: File no. S7-13-00
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i am not an expert but it appears to me to be a conflict of interest for an 
auditor to accept fees for auditing a company and for "consulting" - however 
that might be defined.  and while there may be nothing wrong going on, 
appearances, where money is involved, is very important.
regards,
Charles E Berry, 13835 Seaview  Anacortes WA 98221-8558  (360)299-0922 
ceberry@premier1.net
          

Author:   at Internet
Date:    09/10/2000  11:46 AM
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TO: RULE-COMMENTS at 03SEC
Subject: File No. S7-13-00
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To Whom It May Concern:
     
I would like to go on record in supporting the "Auditor Independence" 
proposed by the SEC.
     
When consulting fees are growing faster than auditing fees year over year, I 
think it is time to "lay all the cards on the table," and enforcement by the 
SEC ont his matter will help achieve that end.
     
Thank you for your attention to this important matter and for your continued 
efforts to try to protect the small investor.  Kudos on the recent ruling to 
end selective disclosure.
     
Respectfully yours,
     
Dorrin M. Birch, M.D.
27068 Oakmead Drive
Perrysburg, OH 43551

Author:  annehans  at Internet
Date:    09/10/2000  5:42 PM
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TO: RULE-COMMENTS at 03SEC
Subject: S7-13-00
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Dear SEC:
     
Please consider the possiblility seriously of making auditors truly 
independent of the companies they audit.  Auditors who also consult for 
the same companies are in a position to abdicate their trust.  We need 
as few of these problems as possible.  We, as stockholders, remember the 
fiasco of the Savings and Loan bailout, and we do not wish to bail out 
auditors or companies who have been questionably audited through the 
declining value of our stock or otherwise.
     
Thank you,
Anne Bruhner

Author:  yuruo chen  at Internet
Date:    09/10/2000  11:15 PM
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TO: RULE-COMMENTS at 03SEC
Subject: File No. S7-13-00
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I believe the accounting service and consulting 
service should be seperated to prevent conflicts of 
interest. And company should release info to general 
public instead of selected professionals, otherwise it 
is against purpose of release company info to help 
investor evaluate company's stock.

Author:  "John Empsall"  at Internet
Date:    09/10/2000  4:53 PM
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TO: RULE-COMMENTS at 03SEC
Subject: File No. S7=13-00
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Dear Sirs:
     
As a private investor, I place great reliance on reports that publicly traded 
corporations file with the SEC. These reports are the most important information
a private individual has to evaluate corporations for investment purposes. In 
the past, I felt these reports were reliable because they were reviewed and/or 
prepared by independent outside auditors.
     
Several recent cases such as the Anderson-Waste Management episode suggest 
auditors for large corporations may not be as independent as previously. Arthur 
Anderson and other top auditors are deriving more revenue from consulting 
services (Anderson Consulting) than from auditing fees from these corporations. 
Until recently, I work for a large corporation which was audited by Arthur 
Anderson, but paid considerably larger fees to Anderson Consulting.
     
While there has been no proof made public that auditing practices may be 
influence by the more revenue import consulting services, there is an increasing
public perception that this may be the case. There is certainly a conflict of 
interest. I believe a company that is acting as an independent auditor should 
have no other business relationships with the corporation being audited. This is
almost universally followed in small businesses and other types organizations 
that are routinely audited. In large corporations, where much larger financial 
risk are at stake, I believe it is even more important to maintain the complete 
independence of the auditor.
     
John Empsall
1551 E. Lookout Dr.
Coeur d'Alene, ID 83815
(208) 762-9956

Author:  Ryan Gillespie  at Internet
Date:    09/10/2000  11:40 PM
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TO: RULE-COMMENTS at 03SEC
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I will always have to agree with avoiding possibilities of conflicts of 
interest, especially if large amounts of money are involved.  If this is 
the case with auditing/consulting firms, then I feel strongly about 
changes in the SEC that could guarantee auditor independence as John 
Bogle of The Vanguard Group discusses below:
     
      "Of course there is no clear evidence on this 
      subject, but [the] proposal says very aptly 
      [that] studies cannot always confirm what common 
      sense makes clear.... The stakes are high, and 
      when consulting fees come to be many times more 
      important than audit fees, it just must be 
      obvious to anybody that independence is clearly 
      likely to be impaired. I
      know it's subtle. I know it's a state of mind. But 
      when self-interests predominate, trouble comes
      not far behind. And it seems to me it comes into 
      special focus as a profession becomes a 
      business.
     
      "In this case, the profession of accounting 
      [has] turn[ed] into the business of consulting 
      and cross-selling. It has potentially very 
      adverse consequences to the public interest....
      If you'll forgive me if I add a parallel to my own 
      experience in the mutual fund business, which
      used to be a business of trusteeship and 
      investment management -- and has now
      become a business of marketing, and the public 
      interest, in my judgment, has not been served 
      thereby. So I feel strongly about the divorce of 
      outside services from the audit services." 
      [Emphasis added.]
     
Thank you,
Ryan Gillespie
     

Author:  "Rita J. Gillis"  at Internet
Date:    09/10/2000  6:38 PM
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TO: RULE-COMMENTS at 03SEC
Subject: File # S7-13-00
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As an individual investor, I believe it is extremely important that the 
information I read about a companies "audited" versus "unaudited" balance 
sheets be unbiased and "just the facts." If large accounting firms, or small 
ones for that matter, receive a large portion of their fees from consulting 
services from the same companies to which they provide auditing services, it 
would seem these firms would be under a great deal of financial pressure to 
keep the customer's happy. As such, it also would seem that providing the 
stock holders with a less than glowing audit report would NOT be the way to 
keep the customers (public companies) happy. This predicament immediately 
makes the accounting firms not only biased, but perhaps even unethical. If 
an accounting firm can make more money through consulting fees, that firm 
would be inclined to "assist" the customer company in improving that not so 
great looking audit report.
I fully support the investigation into the practice of independent auditors 
who also provide consulting services to the same company they are paid to 
audit. And, I hope there are no illegal or unethical findings, but I 
certainly want to know either way.