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U.S. Securities and Exchange Commission

Comments on Proposed Rule:
Revision of the Commission's Auditor Independence Requirements

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

Author: at Internet Date: 09/08/2000 2:29 PM Normal TO: RULE-COMMENTS at 03SEC Subject: File No. S7-13-00 ------------------------------- Message Contents RE: File No. S7-13-00 I think your efforts for auditor independence is a valid position and should be pursued. Jeremy Drzal Individual Investor

Author: Al Fiore at Internet Date: 09/08/2000 3:43 PM Normal TO: RULE-COMMENTS at 03SEC Subject: Auditor Independence ------------------------------- Message Contents Auditing firms should be barred from accepting consulting fees from the corporations that they audit. Al Fiore

Author: Roland & Diane Freeman at Internet Date: 09/08/2000 4:18 PM Normal TO: RULE-COMMENTS at 03SEC Subject: Independant Auditors ------------------------------- Message Contents Dear Sirs, Regarding File No. S7-13-00; as an Investor, I do not feel that consultants and auditors should be from the same company to both audit and consult to the same business, for obvious reasons. You don't have to be too smart to figure out why. Thank you for considering my opinion. Roland Freeman dinro@pacbell.net

Author: "Richard Gay" at Internet Date: 09/08/2000 4:44 PM Normal TO: RULE-COMMENTS at 03SEC Subject: File No S7-13-00 comment ------------------------------- Message Contents I am an individual investor and accurate, unbiased audits are vital to me. I fully support the SEC in its effort to insure audit independence and I would go so far as to require audits and consulting to not be allowed to be performed by the same company. Richard Gay

Author: "Paul M. Huber" at Internet Date: 09/08/2000 10:35 PM Normal TO: RULE-COMMENTS at 03SEC Subject: Auditor Independence ------------------------------- Message Contents Ref: File No. S7-13-00 Auditor Independence I *strongly* support the SEC requiring an impenetrable firewall between auditors and consultants. Anybody who believes that auditors will not be influenced by consultants when they work for the same company also believes in fairy tales. I was very pleased to see the SEC do away with "selective disclosure." Now it is time for the SEC to put an impenetrable firewall between auditors and consultants. One of the biggest differences between the USA markets and foreign markets is the faith and trust in audited financial reports for USA corporations. This faith and trust must be protected if we are to have healthy markets. Respectfully, Paul M. Huber paul.huber@home.com 929 Spinnaker Court Chesapeake, VA 23320

Author: Robert Lancaster at Internet Date: 09/08/2000 6:11 PM Normal TO: RULE-COMMENTS at 03SEC Subject: auditors and consultants ------------------------------- Message Contents As a citizen and an investor I support in the strongest terms the mandatory separation of auditing and investing. The same financial entity--business, corporation, or individual--who audits a company should NOT be allowed to serve as a consultant. The claim that no hard evidence of impropriety is available is specious and idiotic. To imagine that no impropriety would ever occur is to believe in the tooth fairy. Every single thing we know about humanity tells us that it is bound to occur, not in every case but in many cases. Please take expeditious action to prevent it. Sincerely, Robert Lancaster 145 Fairiview Lane Paso Robles, CA 93446

Author: Bernie at Internet Date: 09/08/2000 10:17 PM Normal TO: RULE-COMMENTS at 03SEC Subject: Separation of auditing and consulting businesses ------------------------------- Message Contents Based on my direct experience I would argue that it is important to have these two services completely independent of each other. It is common for auditing firms to sell their related consulting services. It is even a responsibility of audit partners to generate additional business for their company, including consulting business. Clearly this creates moral dilemmas for any auditor who might prepare a critical, or negative, audit report. It is (or was) also common for consulting companies that have an audit business to claim that one of their advantages when competing for business is that the consultants will have an advantage because of the familiarity with the potential consulting client that the audit partners bring with them from years of working with the client. Clearly this implies that the consultants will have access to, and benefit from, audit information and also has tremendous potential to influence audits. This relationship between consultants and auditors does not just have the potential to lead to "soft" audits. It also has the potential to lead to focused audits that highlight flaws which would demand the services of consulting brethren to correct. >From every point of view the consolidation of auditing and consulting services under a common umbrella are not in the best interests of the clients nor of the public. Bernard Mayoff 1411 Huntington Drive Richardson, TX 75080-2812

Author: "Harvey E. Merlin; MD" at Internet Date: 09/08/2000 7:40 PM Normal TO: RULE-COMMENTS at 03SEC Subject: S4 13-- 0 ------------------------------- Message Contents I believe there should be as much space as possible between financial consultants and the actual auditors. It is an accident waiting to happen. Let some firms consult and others audit. Signed--a Motley Fool Stock owner. Harvey E. Merlin, MD

Author: "Herbert Norton" at Internet Date: 09/08/2000 5:25 PM Normal TO: RULE-COMMENTS at 03SEC Subject: Auditor Independence ------------------------------- Message Contents I think that the SEC should take strong measures to make sure that auditors are being truly independent. Our financial system depends on being able to believe the numbers that companies put out. There have already been a number of cases where auditors have not been diligent enough in ferreting out company problems. There accounting independence should not be compromised by consulting fees. Herb Norton hnorton@alum.mit.edu

Author: "peter paget" at Internet Date: 09/09/2000 10:29 AM Normal TO: RULE-COMMENTS at 03SEC CC: Fool@MotleyFool.com at Internet Subject: Audit Independence ------------------------------- Message Contents Dear Sir/Madam: Your proposals regarding Audit Independence are of great interest to me. I am a small investor, $200,000.00 give or take. Investing is the way I am building my retirement assets. I am a practicing lawyer. From my experiences as a practicing lawyer I have seen the subtle machinations of people of reputed independence working together to obtain a common goal for their own individual benefits losing independence of thought and judgment, compromising their own objectivity and ethical considerations in the process. Large profits or greed, as you want to view it, can insidiously bend judgment when enormous stakes are involved. Of course, in these kind of situations there rarely is hard evidence or a "smoking gun" to substantiate what happens. People rarely lay out their conscious mental processes and may to some extent not even recognize their own failure to exercise independence of judgment. Protestations to the contrary by the parties involved, the so-called independent auditors and the businesses, are merely self-serving and are meaningless in truly determining what is in the best interest of the investing public and the nation. Over the last several decades, so-called independent auditors have failed numerous times leaving investors with millions, if not billions, in losses. I recognize the not all of these failures are due to the failure of independent judgment because of outside business contracts with the audited companies, however, even if none of the audit failures were so caused, the public appearance of the loss of independence of the audit function will measurably lessen the publics' acceptance and reliance on "independceen audits." I for one. I support SEC rules that would totally separate the audit function of independent auditors from ANY business connection or relationship with the companies they audit for reports to be disseminated for shareholder or public consumption. I suggest making the rule so comprhensive and all encompassing that the auditors cannot wriggle around it. This would include that the owners of the audit company and the business consulting company cannot have common onwership interest or have common officers or directors. I think you should establish true and complete independence of the audit function in the public interest. Thank you for your consideration Peter E. Paget

Author: "The Doctor" at Internet Date: 09/08/2000 6:35 PM Normal TO: RULE-COMMENTS at 03SEC Subject: Rules for auditors ------------------------------- Message Contents Dear Folks: I believe very strongly that auditors should have not another business connection with any element of either company being audited or performing the audit. The reasons are: too easy to have conflicts of interest, the appearance of impropriety, and just a bad gut feeling about it. This arrangement smells and should and must be eliminated. I have seen, first hand, the devastation that contractors can do in the military sector when they not only stock the henhouse but guard it as well. I would prefer not to see this get out of hand in the securities sector. Thank you very much for listening. Dr. David W.Smith 12 Concord Drive White Hall, AR 71602

Author: at Internet Date: 09/08/2000 8:21 PM Normal TO: RULE-COMMENTS at 03SEC Subject: Auditing and Consulting hearings ------------------------------- Message Contents Gentlemen, As a private investor I look to the SEC to protect my interests by assuring impartial analysis of company data. It is incongruous that a company that audits financial information should be allowed to perform non audit duties with the same company. As an Oklahoman, I witnessed this firsthand in a fiasco of monumental proportions when about twenty years ago the Penn Square Bank in Oklahoma City collapsed, taking with it First Chicago Bank and plunging our city into a ten year long depression. Such conflicts of interest must be stopped. I greatly appreciate that you are looking into this matter and that a swift resolution will result. Sincerely Dan W. Tubb MD 105 S. Bryant #400 Edmond, OK 73034 .

Author: at Internet Date: 09/08/2000 7:58 PM Normal TO: RULE-COMMENTS at 03SEC Subject: Audit issues ------------------------------- Message Contents While I don't understand a lot about the process that auditors go through when they evaluate a company's finances, I do know what I want them to find--the truth. If their relationship is colored in anyway, then this look at the books may not represent the whole truth. As an very small investor that relies on my own limited look at their quarterly and annual statements, I look to the auditing process to make sure that the intricacies of the financials are what they seem. Therefore, it is a no-brainer to expect an auditing firm to not also be a consultant to the company that they are examining. Sincerely, Donna Valle

Author: "Wolff" at Internet Date: 09/08/2000 11:54 PM Normal TO: RULE-COMMENTS at 03SEC Subject: Auditor Independence ------------------------------- Message Contents I strongly urge you to place in effect "File no.S7-13-00" . Stockholders have been kept in the dark long enough. Thank you, William S. Wolff, 8437 Gateway Ct. Englewood, FL. 34224, bkwuf@ewol.com

Author: "taichiplayer" at Internet Date: 09/08/2000 7:42 PM Normal TO: RULE-COMMENTS at 03SEC Subject: analysts reports ------------------------------- Message Contents I would urge you to investigate the correlation between brokage analysts upgrades and downgrades with the brokerage buying and selling of the stocks mentioned in the analyst report. I believe it would help the individual investor to know if a brokerage buys a stock at a much cheaper price after a downgrade of the stock by their analyst. A rule requiring the brokerage to reveal their holdings a week before or after an analyst's report would be very helpful in determining any bias in the report. Thank you for the rule changes that help the individual investor make informed decisions. Richard Woodburn