From: Greer, Donna [Donna.Greer@greerinfo.com] Sent: Wednesday, December 31, 2003 12:34 PM To: 'rule-comments@sec.gov' Subject: File # S7-25-03 [Docket No: RIN 3235-A198];[FR Doc: 03-29932]; [Pa ge 68185-68201]; Practice and procedure: Sarbanes-Oxley Act of 2002; impl ementation-- Rules of practice and related provisions; amendments December 31, 2003 Mr. Jonathan G. Katz, Secretary U. S. Securities and Exchange Commission 450 Fifth Street NW Washington, DC 20549-0609 File Number: S7-25-03 Title: Proposed Amendments to the Rules of Practice and Related Provisions Subject Category: Practice and procedure: Sarbanes-Oxley Act of 2002; implementation-- Rules of practice and related provisions; amendments Docket Id: RIN 3235-A198 CFR Citation: 17 CFR 200, et al. Dear Mr. Katz: I recognize that when an individual chooses to address committees with the stature of this committee, they typically have multiple degrees and several industry credentials to lend weight to their opinion or advice. However, I humbly submit the following information with none of the aforementioned distinctions. I am simply one of the thousands of small business owners that help fuel the economy of this nation. We are not publicly held; however when I learned of the Sarbanes-Oxley Act of 2002 I felt it was an appropriate time to make my voice heard. Our company is a software consulting firm. That being said, we have the opportunity to see how companies of all shapes and sizes handle their accounting practices. In almost all instances, the huge disparity is in reporting standards. One of our software partners even found a company that had a $ 750,000,000.00 monthly reporting error due to reporting off of an independent database outside of the general ledger. This particular company had failed to include some new accounts in their reporting database, thus creating the error. Even if system security is sufficiently addressed and processes are accurately documented to be in compliance with the new ruling, when the reporting is still done incorrectly, the bulk of what this ruling is trying to accomplish will be irrelevant. Enron was allowed to happen because extremely smart people took accepted accounting principles, made them complicated and then perverted them. It seems in life, simple is better. It is my opinion that one way to make companies more restricted in how they can manipulate what is reported to share holders and government bodies is to require them to report directly out of their general ledger. Companies will tell you that they simply replicate their general ledger into a third party database and report out of that database. However, many times, they fail to tie back to the original general ledger, which would confirm that their numbers were correct or if there was a problem. Additionally, the further away from the general ledger you get, the more opportunity there is for systems failure, human error or corruption to take place. There should be an emphasis placed by the SEC or appropriate regulatory agency on publicly traded companies to report the numbers out of the general ledger simply because every time there is an added systems level you decrease the accuracy of the information, the audit trail is eliminated and there is an increased opportunity for fraud. As an example, companies are currently allowed to add accounts and make adjustments outside of the general ledger; this practice should be prohibited immediately, strictly because it is a manual process that takes place in a copy of the books, not the general ledger itself and therefore those transactions are very often not reported. Another large area of concern is the continuing conflict between auditing firms and systems consulting practices. When this Act initially came out, the large audit companies spun off their consulting practices due to a conflict of interest between auditing and systems control. However, companies are once again employing auditors and systems process consultants from the same organizations, although they may operate under different names. It should be prohibited for an auditing firm to have an engagement at a client where another firm that they have a financial interest in is responsible for systems implementations, services or reporting. I recognize that I have not cited any particular ruling or specific accounting principle. I will leave that duty to those more qualified than I; however I do know right from wrong and I feel it is time to institute practices, even if it means we change the way we have always done it, which will require others to do right so that investors and employees will no longer be the victims of selfish, manipulative executives who know how to bend the rules. Let's close the loop holes and eliminate opportunities for false reporting. Respectfully, Donna L. Greer Donna L. Greer donna.greer@greerinfo.com 281-312-3902 -Direct --- Outgoing mail is certified Virus Free. Checked by AVG anti-virus system (http://www.grisoft.com). Version: 6.0.512 / Virus Database: 309 - Release Date: 8/19/2003