Date:    08/29/2000  4:04 PM

Subject: S7-13-00

September 1, 2000
     
Dear Sirs,
     
This letter is to voice my concerns regarding the recently proposed SEC rule 
S7-13-00.  This ruling would have a very adverse impact on me, my clients 
and the accounting profession as a whole while not providing measurable 
results with improving the audits and reporting of companies that it 
effects.
     
There has been no specific independence in fact situations occurring that 
triggered this decision.  In fact, the Public Oversight Board concluded, 
"both the profession and the quality of audits are fundamentally sound." 
The panel stated that it could not find any evidence that the provision of 
non-audit services had hurt audit quality.  On the contrary, it concluded 
that in numerous instances it noted that these additional services 
contributed to a more effective audit. In addition, none of the studies or 
reports cited by the SEC in this proposal concluded that the scope of 
services impaired audit effectiveness, or that an exclusionary ban was 
necessary or appropriate.  The SEC has ignored this conclusion in its 
pursuit of regulation.  It appears as if the SEC is basing its decision to 
move forward with this rule prohibiting non-audit services without fact or 
evidence.  Is the SEC trying to render a solution in search of a problem?
     
The proposal is specifically bad news for CPAs working in industry, since it 
would restrict public companies' freedom of choice when seeking outside 
professional services.  The SEC would force public companies to constantly 
choose whether to hire a firm solely as its auditor or solely as a provider 
of other services.  This in turn will cause a negative effect on recruiting 
and retention of talent within our profession.  The best talents and 
professionals will not want to work in an industry where so much of the 
market is "off-limits" and the firms are limited on upward opportunities and 
growth potential.
     
Most dangerous for our profession is the likelihood of this proposed rule 
setting a precedent for other regulators.  The proposed rule would be viewed 
as a model by state boards of accountancy as well as federal and other 
regulators and could change the whole face of our industry.  This would limit 
the assistance that we could offer our clients in helping them to improve 
their companies reporting and operations.  Speaking from personal experience, 
the wider the services performed for the client, the more effective the audit 
procedures can be structured and performed.  This allows the clients to get 
the most benefit from our assistance with no impairment to independence to 
the auditor.
     
Our profession is a highly regulated industry that thrives on our reputation 
as perceived by the public and us.  There are already standards in place 
that are monitored by the AICPA and other accounting regulatory boards and 
committees that govern the independence issues that are being rehashed by 
the SEC.  The SEC's proposal to restrict services offered by accounting 
firms directly undermines these authoritative bodies and represents a 
restructuring of a profession that has been successful at providing 
investors and the public as a whole with reliable, independent data for many 
years.
     
As written, this proposed ruling should not be passed. Thank you for your 
time in this matter.
     
Elaine Herricks, CPA
2608 Birch
Granbury, Texas 76048