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:  "Thomas Baker"  at Internet
Date:    09/11/2000  10:43 PM
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Please consider this a comment on behalf of similarly situated individual 
investors:
There should be a complete and total ban and prohibition on providing both audit
and consulting services by the same or affiliated companies.   The conflict of 
interest is such that a reasonable person would believe that the impartiality of
the audit was affected.   Please do not heed the self-serving protestations of 
the auditors seeking to expand into a lucrative field.  The effect on the 
individual investor has been devastating as companies "restate" their audited 
earnings.   The individual investor should be able to rely upon the independence
and integrity of a professional third party audit.  
     
thank you for your consideration
Thomas F. Baker
Alexandria, VA 
     

Author:  John Baxter  at Internet
Date:    09/11/2000  11:22 AM
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The primary attribute of an auditor is his independence.  I believe that an 
"Independent Auditor's" integrity and independence have the serious 
potential of being jeopardized, when the auditor is serving a dual role by 
providing consulting and auditing services.  I support the SEC's position on 
this issue.  I am a CPA and I do not share the same view or position as the 
AICPA and public accounting industry.  
     
The investor must be protected.
     
Sincerely,
     
John Baxter
Controller
Thompson Mahogany Company
7400 Edmund Street
Philadelphia, PA 19136
     

Author:  MIRIAM BLATT  at Internet
Date:    09/11/2000  5:21 PM
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Hi,
     
Please create a rule to require that auditors not provide separate 
non-audit services to the same company. This would remove the 
appearance of conflict of interest. Thanks!
     
Miriam Blatt
mblatt@sun.com
Menlo Park
California

Author:  Kimball Bullington  at Internet
Date:    09/11/2000  11:50 AM
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I would like to communicate my concern that "independent" audit results 
are conducted by the same people who provide consulting services.  I am 
a quality management professional and I have long been concerned about 
this in the field of quality certification.  The third party auditors 
are also consultants.  As an investor, I am even more concerned about 
the potential (I believe actual) conflict of interest.
Thank you,
Kimball Bullington
     

Author:  "Tony's Hotmail"  at Internet
Date:    09/11/2000  1:18 PM
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I have been reading with interest about the SEC looking into potential conflicts
when an auditor is providing non-audit services to a company.  I strongly 
believe that this compromises the auditor's judgement and can undermine the 
public confidence in the markets.  It is yet another way in which small 
investors are at a disadvantage because although disclosure is supposed to be 
uniformly available to the public, it is the large players that can react the 
fastest when an investigation or even a hint of investigation is announced.
     
Thank you,
     
Anthony Checkal
     

Author:  "clint"  at Internet
Date:    09/11/2000  3:53 PM
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I support SEC action to establish rules in regard to Auditors who offer 
consulting services to their client's.  It seems to be the "Fox guarding the Hen
House"  scenario all over again..
     

Author:  "TaxSpecialist"  at Internet
Date:    09/11/2000  7:03 PM
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Dear Sirs:
     
I have been a CPA and a member of the AICPA since 1976.  I have seen the changes
over the years as the large firms put DOLLARS before the long and hard-won 
integrity that the initials "CPA" stood for back when I was in school.
     
It has been far too long that the SEC has remained silent.  You should have 
jumped on this back in the 1980s.  Of course, the big money behind the national 
CPA firms will be fighting you tooth and nail.  DON'T BACK DOWN!
     
Help put INTEGRITY back into the "CPA" initials that I worked (and my 
predecessors worked) so hard to earn.  
     
The licenses of the partners of the firms doing consulting and investing in the 
very same companies that they are so-called "auditing" should be permanently 
REVOKED as these charlatans have proven by their actions to care solely for 
their own pocketbooks and not the integrity (or even the appearance of 
integrity) of the profession.
     
Colin M. Cody, CPA, CMA
6004 Main St
Trumbull  CT  06611
     

Author:  Charles Cole  at Internet
Date:    09/11/2000  10:18 AM
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Dear Sirs:
     
  I as an individual investor I am concerned about the
impartiality of independent auditors who also offer 
consulting services to corporate customers.  
     
  I am an independent business consultant and I have
worked with several of the 'Big Six' consulting groups. 
 I have worked with both their consulting services and 
their auditing services.  Although I have never seen 
individual instances of the consulting group 
influencing auditing results, I have no doubt there are 
conflicts of interest between the two branches.
     
  I believe the auditing groups would bend over
backwards to accomodate potential consulting customers 
(and vice versa).  Please pursue your investigations 
against these companies to ensure the interests of 
individual investors do not suffer at the hands of 
corporate customers.
     
Sincerely yours, 
     
Charles C. Cole
4504 Hawk Run
Norcross, GA 30092
(770) 797-2627
     

Author:  "Ted Cross @ Reporter Office Products"  at Internet
Date:    09/11/2000  10:43 AM
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I believe that it is essential to separate the audit function performed for 
businesses on behalf of their investors from the for fee services provided 
to management by these same "auditing" firms.  Genuine audits have been a 
strength of the US market compared to foreign markets.  Keep them clean and 
precise.
     

Author:  "Davis; Greg (Tandem)"  at Internet
Date:    09/11/2000  11:02 AM
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I am a CPA, but I am more of an investor than an auditor.  I think what you 
are looking at, separation of consulting and auditing services, is a good 
thing.  The CPA profession already has in its code of ethics a 
responsibility to not only to be independent in fact, but to be independent 
in appearance as well.  This definitely comes under the appearance area if 
not the in fact area.  I believe the AICPA, FASB and SEC should have no 
problem in working together on this issue.  It is in the interest of the 
accounting profession to keep the appearance of independence and decrease 
the likelihood of a lack of independence in fact.
     
The only problem I see is that the best people to provide consulting 
services are the auditors.  Auditors get into the very details of a company. 
They gain insight like no one else.  One solution I can think of is to make 
sure that anyone with sign off authority for a financial statement not be 
allowed to participate in the consulting company financially, or at least 
keep participation below a certain percentage (no significant interest).
Any financial owners in the consulting company can not have an interest in 
the auditing company, at least no significant interest.  At some level of 
management, where people start to have significant authority over audit 
decisions is where the separation should start.  I see no problem with the 
audit company charging the consulting company for use of their audit staff 
or work product, but control over the audit staff must always be by the 
audit company.  Audit firms and consulting firms would have to work out 
agreements with each other and their mutual clients, but would be two 
companies owned/controlled by different people.
     
I see no reason why something like the above can not be worked out.
     
Sincerely,
 - Gregory Davis, CPA

Author:  Steven DeStefano  at Internet
Date:    09/11/2000  9:25 AM
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   To whom it may concern:
       I as an individual investor strongly support
the SEC in its investigation regarding potential 
conflicts of interest for companies providing both 
auditing services and non-auditing consulting 
services. Companies providing both services are not 
acting in the best interests of the public.
                 Sincerely,
                 Steven A. DeStefano
                 10838 Sonora Ave.
                 Alta Loma, CA   91701
     
     

Author:  "Shirley DeWald"  at Internet
Date:    09/11/2000  2:50 PM
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I am asking you as an individual investor to separate the consulting from the 
auditing so that we are protected.
     
Thank you,
     
Shirley DeWald
     

Author:  Karl Dronsella  at Internet
Date:    09/11/2000  8:07 AM
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There is no doubt in my mind,  the SEC is moving in the right direction. 
The consultant can not be a really unbiased auditor.
Thank you SEC.
Karl Dronsella
     

Author:  "Daniel Duke"  at Internet
Date:    09/11/2000  2:43 PM
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Subject: S7-13-00   "AUDITOR INDEPENDENCE"
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    CPA'S SHOULD MAKE A DECISION:  EITHER DO AUDITS OR DO CONSULTING.  NOT
BOTH.  THERE IS TOO MUCH OF AN "APPEARANCE  OF IMPROPRIETY" BY DOING BOTH 
FOR THE SAME CLIENT, BOTH AT THE SAME TIME, ANYWAY!.    THANK YOU
DAN DUKE
7867 ADAMS WAY
BUENA PARK,  CA  90620
     

Author:  "Robert B. Dunlap II"  at Internet
Date:    09/11/2000  10:46 AM
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I support the adoption of rules that require the independence of auditors 
in accounting for publicly held companies.  Thank you.
     
Robert B. Dunlap
P.O. Box 5721 CHRB
Saipan, MP 96950
     
Home: (670) 322-3166
Work: (670) 322-3455
     
Work E-Mail: rbd@carlsmith.com
     

Author:  "Fiester;Stacey E"  at Internet
Date:    09/11/2000  11:15 AM
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I am in favor of the SEC conducting an inquiry into Auditor Independence.
     
Stacey E. Fiester

Author:  "Fink; Wayne L"  at Internet
Date:    09/11/2000  3:28 PM
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I feel very strongly that the functions of Auditing should be divorced from 
any other services provided to a firm, including accounting, and consulting. 
The current practices harm the individual investor.  I find we can no longer 
trust the auditors statement in a companies annual report or 10K, since we 
don't even know if the auditors have other business activities with the 
company being audited.  
     
If auditors are allowed to provide other services to a publicly traded 
company, there should at least be a requirement that these other services 
are disclosed with the auditors statement.  Then at least, we would be 
alerted to the possible conflict of interest.
     
Wayne L. Fink, PE, CISSP, MCP
     

Author:  "Evelyn Geller; CFA"  at Internet
Date:    09/11/2000  11:19 AM
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you are undertaking one of the bravest efforts in your history. security 
analysis rests on the integrity of the data. i will be watching the 
proceedings with fascination.
     

Author:  "Warren Hageman"  at Internet
Date:    09/11/2000  11:40 AM
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Ladies and Gentlemen,
     
Working in the insurance industry I know that sometimes concessions are made to 
our customer's in order to insure their satisfaction with our services. However,
my company is not being paid to be impartial as are the auditing firms who also 
sell consulting services to their customer's. It would be impossible for me to 
imagine that the auditing firms don't take continuation of these consulting 
fee's into consideration when doing an audit and thus compromising their 
impartiality. 
     
This conflict of interest is something that needs looking into. As a stock 
investor expecting to find impartial audit information when doing research on a 
particular company it's critical. Please do pursue this issue so investors like 
my self can be assured that we are buying stocks based on merit and not cooked 
data. Thank you. 
     
     
     
     
                                Warren Hageman
     

Author:  dock hroch  at Internet
Date:    09/11/2000  9:17 AM
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I would like to say that making an auditor responsible 
to the investors should be a high priority.That is 
part of their job.I'm a share holder of Waste 
Management Inc.. We lost two thirds of our investment 
because of the auditor scratching the companies back. 
They need to be totally independent.We need to be told 
when they break the rules so we can vote them out as 
auditor. 
Thank you Dock & Amy Hroch
     

Author:   at Internet
Date:    09/11/2000  11:46 AM
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Greetings,
     
If a company X does both the audit and the consulting for public company Y and 
the consulting fees are much greater than the audit fees, then how can you trust
company X's audit report?  You can not!!  Being a small investor, I have to rely
on the audit report that my target company is following the accounting rules.
If I can not trust the auditor's report, then I can not trust the financial 
statements.
     
I feel that the audit and the consulting to a public company should be done by 
different service suppliers.
     
Regards, Lindsey Humphrey
     
     

Author:  Navin Jaffer  at Internet
Date:    09/11/2000  12:21 PM
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As an individual investor, I am gratified to the SEC for pursuing Auditor 
Independence
in order to keep consulting and accounting services separate to reduce the 
apparent 
conflict of interest.
     
Thanks,
     
Navin Jaffer
BOPS, Inc.
6340 Quadrangle Drive
Suite 210
Chapel Hill, NC 27514
tel:      (919) 403-6757, ext. 127
email:  Navinj@bops.com
     
     

Author:  "Sunil John"  at Internet
Date:    09/11/2000  2:10 PM
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To whom it may concern,
     
I am in favor of the SEC's position that auditors and consulting firms 
should function independently.  Having been around the consulting side for a 
while, it seems quite probable to me that some conflicts of interest 
occur... be they intentional or unintentional.  As an individual investor, 
the accuracy of financial statements is the primary resource I use to 
evaluate a company.  I may make mistakes with my investing philosophy, but I 
don't want those mistakes to be the result of misinformation.
     
Sunil John
     
     
___________________________________________________________

Author:  MH Johnson  at Internet
Date:    09/11/2000  4:49 PM
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TO: hayden_johnson@us.ibm.com at Internet
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I am an interested individual investor who is concerned about the 
increase of government intervention in markets as evidenced by the 
current concern with the objectivity of auditors.  To understand my 
concern you must first consider the role of business managers and 
auditors as they relate to investors and analysts.  Managers use 
auditors in an effort to best articulate the status of the resources 
entrusted to them by investors who are advised by analysts.  Managers 
and auditors have a huge tool set to use when providing these 
communications.  These tools are summarized by GAAP and are understood 
across the industry by sophisticated investors and analysts.  These are 
communication tools but readers must understand the language being used 
(accounting methods utilized) before extracting a message.  To imply 
that the rare but highly publicized instances of miscommunication are 
akin to industry wide fraud is rediculous.  Auditors in the end are paid 
by company owners who have a huge interest in correct and legal 
reporting of the status of the resource they have intrusted to their 
management.  Auditors maintain customers based on their market 
reputation as unbiased reporters of a company's financial condition so 
to co-conspire with management in an effort to decieve their own 
customers (company ownership) is not something that any reasonable 
auditor would consider.  The market (ie. company stockholders), not the 
US Government, is best suited to handle those suspected of unscrupulous 
behavior.  In the sited case of MicroStrategy, I would ask why 
sophisticated analysts did not change thier ratings of the company in 
March after the mangement/auditors were "exposed" by the journalism 
majors from Forbes Magazine.   The answer is that sophisticated analysts 
and investors understood the company's revenue reporting mechanism, had 
a strong knowledge of the company's operating model and how it was 
changing toward future services and were able to understand the real 
financial position of MSTR based on this research.  They were not 
surprised by the restatement.  To imply that we should dumb down 
accounting rules to facilitate the naive, channel surfing, general 
public who think that you should be able to evaluate everything about a 
company based on one number or ratio is silly.  It takes time, 
intelligent research, and significant analysis to understand the value 
proposition of any given company.  Unfortunately, these are all things 
the press and general public have little patience for.
     
Next, increased regulation of auditing by the US Government reduces value 
in the marketplace by creating more unnecessary government drag on the 
economy.  Auditors serve a critical purpose to ownership and will 
demonstrate the characteristics required by company ownership to meet the 
demands of the owners of capital.  Do not steal the capital that makes up 
my aging grandmother's retirement savings by imposing more unnecessary 
regulation on industry to quiet vocal naivete. To do so would not only be 
criminal but far beyond the calling and scope of a fair and just 
government of the people.
     
Thank you for your kind consideration. 
Hayden Johnson
Solutions Manager
IBM, Corp
Austin, TX
     

Author:   at Internet
Date:    09/11/2000  8:18 PM
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Please separate the auditors from the consultants, and in that way protect 
the individual investors, such as myself, who have no way of legally 
fighting the supposedly "independent" auditors who have their own 
self-interests in the companies they audit (i.e. the companies that are also 
their customers on the consulting side).
     
Thank you for helping the public.
     
~Joseph Jornadal
     

Author:  "Bob Kaplan"  at Internet
Date:    09/11/2000  10:18 AM
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Gentlemen,
    I am writing in support of the separation of audit services from non-audit
services by the same company. I know this will inhibit the volume of business as
defined by the businesses themselves. However, I don't think that they should 
have been allowed to define that. 
    If they are competing for lucrative consulting contracts, they have a
conflict of interest in the audits that they do. 
    Perhaps the auditing industry can develop standards which will eliminate
this possible conflict, but I suspect it will also decrease the volume of their 
audit incomes.
                    Sincerely,
     
                     Robert L. Kaplan
     

Author:  "Kiele; William; Civ; PLDM"  at Internet
Date:    09/11/2000  11:54 AM
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Sirs or Ma'am's,
        As a small investor I know the weight of my opinion is small, but I
believe any rule that reduces the inefficiency of information and eliminates 
even the appearance of conflict is to be applauded and put in place.  I am a 
retired Air Force officer, and the issue of conflict of interest is 
especially important, since the trust of subordinates hinges on their belief 
that the officer in charge has only the mission and their part in it at 
heart.  Any time self-interest is exhibited by a leader, morale drops 
precipitously as the belief that it is "his benefit at their expense".
     
        The scoring system by auditors makes a general claim as to the
fitness of the books and as such is public information to be used by all (by 
the way, way to go on the Non-public disclosure rule!);  those auditors who 
cook the books have inside knowledge that can be sold at a price to the 
right bidder--in this case, the consulting arm of the company.
     
        I know this argument is not novel, but I feel I must add my voice to
its merit.  THanx for working hard.
     
Dr Bill Kiele
Head, Mathematics Department
USAF Academy Preparatory School

Author:  "KOTOSKI;RALPH (HP-Boise;ex1)"  at Internet
Date:    09/11/2000  6:08 PM
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Please ensure that selective disclosure is abolished.  Protect us little 
guys!
     
Thanks!
     
Ralph Kotoski

Author:  "Richard Lilga"  at Internet
Date:    09/11/2000  6:24 PM
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Dear Sir or Ms.:
     
As an independent individual investor I am full in support of your position 
regarding the total separation
of audit and consulting functions within the accounting business.
     
It seems to me that an auditor could not possibly maintain "an independence in 
mental attitude in all
matters relating to an assignment" where his client is a current or potential 
source of consulting revenues
for the firm that pays his salary.  This is in direct conflict with the AICPA 
standard of auditing independence.
     
For an auditor to be truly independent, the audit function of the CPA profession
MUST be entirely separate
from all other services offered by CPA's.
     
Sincerely,
     
Richard Lilga
311 Bel Air Drive NE
Grand Rapids, MI 49503-3919
     
     

Author:   at Internet
Date:    09/11/2000  6:03 PM
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I am in favor of separating the auditors from the consultants. I do not 
believe that the auditing function is undertaken with as much vigor with 
large consulting fees hanging on the results of the audit.I know some 
partners in accounting firms and they are under tremendous pressure to make 
things "go right" when auditing a client where the firm also has a large 
consulting presence.

Author:  Charles Marlio  at Internet
Date:    09/11/2000  12:50 PM
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To whom it may concern:
     
        In my capacity as an investment advisor and as a private citizen,  I
am writing to strongly urge adaptation of the proposed regulation, which I 
understand would place strict limitations on the consulting work being 
undertaken by firms who are also engaged by the same clients to do auditing 
work.  The problem of conflict of interest is so obvious as to defy 
description.  The only point that should be addressed, in my opinion, is how 
this practice has been allowed to continue as long as it has.
     
        One need only consider the abysmal job that some of the Big 5 firms
have done in some headline cases (e.g. MicroStrategy, McKesson HBOC, 
Cendant, and Waste Management) in recent years to understand why this 
practice is so objectionable.  But I would suggest that the commission 
consider some of the secondary effects that this situation may have caused 
as well.  For example, billions of dollars in market capitalization were 
lost to investors in Tyco on the basis of the mere suggestion that financial 
irregularities existed.  To be sure, these are far more difficult to 
measure, but they may be even more important in terms of their overall 
effect on the US economy. 
     
          The fact that the auditors of the company did not command such
respect as to prevent the massive decline in Tyco's capitalization may well 
have been unavoidable.  Ask yourselves: what auditor could Tyco have 
employed that would have been free from such a taint?  All major 
corporations are effectively required to use one of the Big 5 firms in order 
that the market give their financial statements even a grudging degree of 
credibility.  But even these are not trusted to perform their professional 
responsibilities - if the market's reaction to rumor is any gauge. 
Meanwhile, the investing community is exposed to the machinations of 
rumor-mongerers who are able to benefit from the absence of a proper system 
of accountability.
     
        It is true that even an experienced, honest, and unbiased auditor
may not be able to discern fraud if there are systemic abuses that exist 
within a company.  But can anyone doubt that such an auditor is less likely 
to discover the abuse in an instance where his or her firm is deriving the 
majority of its operating profits from the consultation services it offers 
to that client and others?   
     
     
     
Yours sincerely,
     
     
     
Charles Mosseri-Marlio

Author:   at Internet
Date:    09/11/2000  2:23 PM
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I am a CPA with over 25 years experience in public practice. Several of those 
years were with an international firm. There is no question that there is an 
inherent and publicly perceived conflict of interest when the same public 
accounting firm  performs and audit of a client they also perform consulting 
services for. The conflict is even more inherent today when audit fees are so 
comparatively small in relation to the consulting services realized on the 
same client.
     
I urge you to implement the proposed Rule Governing Audit Independence as 
soon as possible.
     
     
     
David Masini CPA
     

Author:   at Internet
Date:    09/11/2000  12:48 PM
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This may be a headache to consulting firms, but it is another way to 
protect my money as an investor.  And as a part owner in these companies, I 
would be much more secure in knowing that no conflicts of interest were 
introduced during the auditing process.  I fully support this move by the 
SEC.  Thanks,
     
-David McAndrews
     
     

Author:  "Steve McConnel"  at Internet
Date:    09/11/2000  6:40 PM
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CC: "Office"  at Internet
Subject: S7-13-00
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I am writing to express my serious concerns about the rule prohibiting 
non-audit services to be provided by auditors of SEC registrants.
     
The SEC has based its decision to move forward with this rule without facts 
or evidence that the provision of, for example, advocacy based tax services, 
to an SEC registrant creates an independence problem from an audit 
standpoint.  Even the SEC admits that there is no empirical evidence that 
non-audit services have compromised audit quality or auditor independence, 
nor ever caused an audit failure.  None of the studies or reports cited by 
the SEC concluded that the scope of services impaired audit effectiveness, 
or that an exclusionary ban was necessary or appropriate.
     
The SEC ignored the conclusion of the current Panel on Audit Effectiveness 
of the Public Oversight Board, a panel that was formed at the request of the 
SEC.  The panel concluded that, "both the profession and the quality of 
audits are fundamentally sound."  The panel said it could find no evidence 
that the provision of non-audit services has hurt audit quality.  On the 
contrary, it concluded that in numerous instances non-audit services 
contributed to a more effective audit.
     
As a former member of a state Board of Accountancy, and a professional who 
has been actively involved is state board issues at the national level, I am 
unaware of an consideration by state boards of a need for a rule such as has 
been proposed by the SEC.  State Boards of Accountancy have had no evidence 
that this kind of a rule would protect the public.  However, the enactment 
by the SEC of this rule could cause accountancy boards and other regulators 
to enact similar rules.  This would impact accounting firms that do not 
audit SEC registrants.  The proposed SEC rule could be viewed as the new 
model by state boards of accountancy, as well as federal (e.g., banking and 
ERISA) and other regulators.  These new proposed SEC rules could influence 
the regulatory approach to auditor independence outside the United States as 
well.  The resulting "cure" would be worse than the disease, creating 
artificial regulatory constraints to efficient provision of accounting 
services.
     
I am a partner in a regional accounting firm; one which has relatively few 
SEC registrants.  These companies do not have the administrative 
infrastructure to keep up with many of the requirements of the SEC and other 
regulators.  Most of these companies rely on their CPA's to provide a broad 
range of such services, including audits, which are most efficiently 
provided by a single firm.  The proposed rule would eliminate the ability of 
these companies to deal most efficiently with these issues as it would 
require that more than one firm be employed and kept up to date in order to 
obtain the required information.
     
For example, the SEC claims its proposed rule "would not affect tax-related 
services" to audit clients.  However, it would ban acting as an advocate for 
an audit client, or providing expert services in administrative proceedings, 
thus (except in preparing returns) potentially prohibiting CPAs from 
representing audit clients before the IRS.
     
This rule is a solution in search of a problem and should not be finalized.
     
Yours very truly,
     
     
Stephen S. McConnel
mccon@cyberhighway.com
     
31393 S.W. Marsh Hawk Meadow Lane
Wilsonville, OR 97070
     
     

Author:  Daniel Nicollet  at Internet
Date:    09/11/2000  2:53 PM
Normal
TO: RULE-COMMENTS at 03SEC
Subject: Proposed Regulation FD: File No. S7-31-99
------------------------------- Message Contents 
I am completely against selective disclosure.  Open markets need to provide 
the same access to information for everyone!  That's simple and nothing else 
makes sense.
Daniel Nicollet
--
Daniel Nicollet 
Internet Startup Management
Bay Area
     
     

Author:  edward  opton  at Internet
Date:    09/11/2000  9:21 AM
Normal
TO: RULE-COMMENTS at 03SEC
Subject: File S7-13-00 -- Independence of Auditors
------------------------------- Message Contents 
I strongly urge the SEC to force a separation between auditing and 
consulting.  Multiple, conflicting financial relationships between an 
auditor and its clients must, inevitably, lead to loss of independence and 
bending of the truth. The losers will be this nation as a whole and, 
particularly, honest businesses and investors, such as myself.
     

Author:  "Thomp Pattermann"  at Internet
Date:    09/11/2000  12:43 PM
Normal
TO: RULE-COMMENTS at 03SEC
Subject: File No. S7-13-00
------------------------------- Message Contents 
I was notified about the current SEC topic by a Motley Fool email update.
     
In the legal profession, we are required to avoid the appearance of impropriety 
when conducting business. The same applies to your current investigation of 
auditor independence. If you are providing consulting services, then your 
ability/willingness to perform a complete and independent audit is suspect. 
     
As the large accounting firms hire more attorneys and more blatantly practice 
law (without a license to do so), they should be governed by the same rules that
apply to law firms. They already advertise the completion of the necessary 
paperwork for an IPO in exchange for a percentage of the stock in the company. 
Invariably they will also seek to provide the company consolation services and 
audit services. Can such an "unholy" alliance be trusted? I think not. 
     
Why allow a practice that could conceivably harm such a large part of the 
market, merely based upon the argument of "no empirical evidence," when any such
evidence would be destroyed or sealed before it could see any real "light." 
Require them to avoid the appearance of impropriety or conflict and truly 
maintain an INDEPENDENT audit.
     
Good luck with your task ahead.
     
Sincerely,
     
T.J. Pattermann
     
Thomp J. Patterman
Smith Peterson Law Firm
35 Main Place, Suite 300
P.O. Box 249
Council Bluffs, IA  51502-0249
Phone: 712-328-1833
Fax: 712-328-8320
     
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Author:  Tim Persons  at Internet
Date:    09/11/2000  11:24 AM
Normal
TO: RULE-COMMENTS at 03SEC
Subject: File No. S7-13-00
------------------------------- Message Contents 
To Whom It May Concern:
     
I am writing to voice my support of the SEC initiative regarding the issue of 
"Auditor Independence".  Firms that offer both auditing and consulting fees to a
     
company clearly represent a conflict of interest concerning individual 
investors.
     
Our gratitude is also extended to the SEC for banning the practice of selective 
disclosure this past summer.  Thank you for your efforts to create ethical and 
reasonable investment practices concerning institutional investors.
     
     
Sincerely,
     
Timothy M. and Gena D. Persons
     
_________________________________________
     
Timothy M. Persons, M.Sc.
Department of Medical Engineering
Wake Forest University School of Medicine 
Medical Center Blvd.
Winston-Salem, NC  27157-1022
Phone:  (336) 716-3260
Fax:    (336) 716-2870
tpersons@wfubmc.edu
http://www.rad.wfubmc.edu/~tim/home.html 
_________________________________________
     

Author:  Mark Pocock  at Internet
Date:    09/11/2000  5:49 PM
Normal
TO: RULE-COMMENTS at 03SEC
Subject: File No. S7-13-00
------------------------------- Message Contents 
I do believe that auditor independence is impaired in most cases where 
additional services are sold to audit clients.  I support the SEC's position 
and ruling on this subject.  As a former auditor, I understand the pressures 
to cross-sell to existing audit clients.  It should be obvious to anyone 
that as long as lucrative consulting deals are at stake that hinge on a 
client being happy with corollary services provided, independence no longer 
exists.  Independence is critical to the auditor's credibility.  Anything 
that potentially impairs this, even implicitly, should be carefully 
regulated.  Unfotunately, the investor's interests and their ability to 
trust financial information must be a higher priority than public accounting 
firms' bottom line.
     
Mark Pocock
Accounting Manager
Tegris Corporation
(425) 990-3300 (ext. 5232)
     

Author:  Larry Porschen  at Internet
Date:    09/11/2000  2:57 PM
Normal
TO: RULE-COMMENTS at 03SEC
Subject: File No. S7-13-00
------------------------------- Message Contents 
Mr. Jonathan G. Katz
Securities and Exchange Commission
450 Fifth Street NW
Washington, DC 20549-0609
     
Dear Mr. Katz:
     
On June 27, 2000, the United States Securities and Exchange Commission (the 
"SEC" or "Commission") approved the issuance of a major new rule proposal that 
would force a restructuring of the accounting profession and radically alter 
independence requirements for accounting firms that audit SEC registrants.  This
is the most significant rule proposal on auditor independence since the federal 
securities laws were enacted in the 1930s.  
     
The SEC has based its decision to move forward with this rule prohibiting 
non-audit services without facts or evidence.  Even the SEC admits that there is
no empirical evidence that non-audit services have compromised audit quality or 
auditor independence, nor ever caused an audit failure.  None of the studies or 
reports cited by the SEC concluded that the scope of services impaired audit 
effectiveness, or that an exclusionary ban was necessary or appropriate.  The 
SEC's proposed rule is a solution in search of a problem.
     
The SEC has needlessly tied its popular and long-overdue modernization of family
disqualification rules-depression-era rules that discriminate against working 
women and two-career families-to its far more controversial scope of services 
initiative.  Modernization of the financial-interest standards can and should 
occur on an expedited basis, independent of the scope of services initiative. 
The scope of services initiative requires more time for fact finding and 
analysis than provided by the SEC's time frame.
     
In conclusion, the SEC's proposal to restrict the services offered by accounting
firms represents a fundamental restructuring of a profession that has 
successfully given investors the reliable, independent data they need for the 
past century.  A decision by a government agency to tell some business 
organizations what services they may offer and to tell other businesses from 
whom they can buy services is an extraordinary economic intervention without any
empirical or other basis.  We think most Americans would find this a curious 
public policy position for their government to take.
     
This scope of services rule must not be allowed to go forward.  This will have a
negative impact on our Firm's audit practice and overall financial health.
     
     
Sincerely,
     
     
     
     
Larry J. Porschen
Managing Partner
Grace & Company, LLP
     
     
     
     
Larry J. Porschen
Grace Advisors, Inc.
314.615.1220 Direct
314.615.1330 Fax
ljp@grace1.com
     
CONFIDENTIALITY NOTICE
--------------------------------------------------------------------------------
------------------------------
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are not the
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------------------------------
     
     

Author:  ROLLINS Mark  at Internet
Date:    09/11/2000  3:40 PM
Normal
TO: RULE-COMMENTS at 03SEC
Subject: File No. S7-13-00
------------------------------- Message Contents 
There is already enough incentive for the Big 5 firms to not compromise an 
audit.  First and foremost, there's the matter of integrity, accountability, 
and reputation - not to mention the possibility of class action lawsuits.
     
Why not continue to give companies the freedom to purchase their consulting 
services from whomever they choose?  I recommend that Mr. Levitt read F.A. 
Hayek's "The Road To Serfdom."  Mr. Levitt strikes me as one of the 
'specialists' that Hayek describes in his book.  

Author:  "Scott Rubel"  at Internet
Date:    09/11/2000  11:25 AM
Normal
TO: RULE-COMMENTS at 03SEC
Subject: File No. S7-13-00
------------------------------- Message Contents 
To Whom It May Concern:
     
I would like to express my support for the SEC's proposal to require the 
separation of auditing and consulting activities.  As an individual 
investor I find it deeply disturbing that the supposedly impartial data 
upon which I rely to make my investing decisions could be subject to 
insider manipulation for the benefit of a consulting group.  I strongly 
encourage the SEC to move forward with its efforts to preserve auditor 
independence.
     
Sincerely,
Scott Rubel
     
     

Author:  "nelson pagan-saez"  at Internet
Date:    09/11/2000  10:59 AM
Normal
TO: RULE-COMMENTS at 03SEC
Subject: File No. S7-13-00
------------------------------- Message Contents 
Right on.
_________________________________________________________________________ 
Get Your Private, Free E-mail from MSN Hotmail at http://www.hotmail.com.
     
Share information about yourself, create your own public profile at 
http://profiles.msn.com.
     

Author:  Kevin Scott  at Internet
Date:    09/11/2000  2:52 PM
Normal
TO: RULE-COMMENTS at 03SEC
Subject: File No. S7-13-00
------------------------------- Message Contents 
As a citizen of the United States, and an investor in America's companies, 
I would like to voice my strong support for the implementation of 
regulations prohibiting the provision of consulting or like services by 
auditers to the firms that they audit.  Such relationships are inherently 
suspect, as the auditor has a stake in the outcome of the audit -- 
defeating the purpose of an 'independent' audit -- the provision of 
complete and unbiased information to investors.  While not a proponent of 
bigger, more intrusive government, I feel extremely strongly, especially in 
the wake of the MicroStrategy fiasco, that it is important for the SEC to 
step in on this issue to ensure that all investors and potential investors 
are provided with timely, accurate, and complete information on publicly 
traded companies.
     
Thank you for your consideration of my comments.
     
Sincerely,
     
Kevin Scott
11824 Falls Road
Cockeysville, MD  21030

Author:  "Joel E. Steirman; CPA"  at Internet
Date:    09/11/2000  3:06 PM
Normal
TO: RULE-COMMENTS at 03SEC
Subject: File no. S7-13-00
------------------------------- Message Contents 
Dear Sir or Madam:
     
This commnication is to express my support for the proposed rule 
limiting auditors to perform audits or accounting work only for SEC 
clients.
     
As a CPA, I know it is near impossible for a CPA firm not to be 
conscious of the other services that are provided to publicly held 
firms. These other services are sometimes larger than the audit itself. 
Usually these other services are much more profitable. Therefore, it is 
difficult for an auditor to be trully independent when the promise or 
reality of money, in the form of consulting services, are connected to 
the audit engagement.
     
Please do not bend to the well organized comments produced by the AICPA 
and the large CPA firms. This rule will only help protect all of us that 
rely on the auditors to be trully independent. My retirment funds are 
invested in publicly held companies. I want trully independent audits of 
these companies.
     
Joel E. Steirman, CPA
     

Author:  "Stephen S. McConnel"  at Internet
Date:    09/11/2000  8:03 AM
Normal
TO: RULE-COMMENTS at 03SEC
Subject: S7-13-00
------------------------------- Message Contents 
     
     
stevem@mossadams.com
     
This transmission contains information which is confidential and is intended 
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Author:  "Richard K. (Rick) Sykes"  at Internet
Date:    09/11/2000  10:45 AM
Normal
TO: RULE-COMMENTS at 03SEC
Subject: File No. S7-13-00
------------------------------- Message Contents 
Dear Persons:
     
Chairman Levitt's speech
(http://www.sec.gov/news/speeches/spch370.htm) says it better than I 
could.  I applaud the effort to keep financial audits free from any 
suspicion of compromise.
     
While I don't feel qualified to recommend a specific course of action, 
I agree that something should be done.  Asking an auditor to 
(sometimes) act against his company's financial interests is asking 
too much.
     
Thank you.
-- 
     
****   PLEASE DO NOT SEND ME ATTACHMENTS > 50 KBytes   **** 
****             WITHOUT PRIOR ARRANGEMENT             ****
     
Rick Sykes      Senior Engineer,  SysAdmin      LinCom Corporation 
rsykes@lincom-asg.com

Author:   at Internet
Date:    09/11/2000  4:24 PM
Normal
TO: RULE-COMMENTS at 03SEC
Subject: S7-13-00
------------------------------- Message Contents 
Consulting Services represent a conflict of interest for auditors. 
Appropriate action apprciated .
Sincerly,
Wmaag407@aol.com

Author:  "Tom Worley"  at Internet
Date:    09/11/2000  7:20 PM
Normal
TO: RULE-COMMENTS at 03SEC
Subject: File No. S7-13-00
------------------------------- Message Contents 
I must trust the financial filings of publicly traded 
corporations. In particular, I must trust the annually audited 
report.  I cannot personally go in and audit a company's books, 
nor would I be permitted to do so, prior to investing in that 
company.
     
I can recall a number of past cases where subsequent disclosure 
showed financial fraud. One in particular stands out, where the 
company claimed 60 or so retail outlets when, in fact, they only 
had a dozen or so. The auditor's defense? "we took the company's 
word for that"
     
The independence of an auditor, and the accuracy of its audit, is 
paramount. As an outsider, I do not have the ability to know if 
an auditing firm is being effectively "paid off" with outside 
consulting fees. And even if a quality auditing firm would never 
consciously change its audit report because of this income, 
nonetheless an audit is made up of individuals, and those 
individuals could likely be well aware they are auditing a firm 
that pays part of their paycheck with consulting fees. That could 
easily lead to a bias favorable to the company when GAAP rules 
leave some wiggle room.
     
Auditors must be independent if the audited report is to mean 
anything.  If that cannot be achieved, we may as well abandon the 
requirement for an annually audited financial statement.
     
Tom Worley
stkguru@netside.net
chat with me at ICQ # 5568838
get ICQ software at http://www.icq.com/icqhomepage.html