September 25, 2000

Mr. Arthur Levitt
The Securities and Exchange Commission
Office of Investor Education and Assistance
450 Fifth Street, NW
Washington D.C. 20549

RE: Comment File S7-13-00 -- Déjà vu all over again

"It's like déjà vu all over again," ala Yogi Berra, certainly applies to some of the issues relating to the greed and arrogance of the Big Five accounting firms.

In 1979, I testified before a Subcommittee of the Senate Committee on Government Operations on the matter of the risk of the lack of independence of auditors, and certainly the lack of the appearance of independence, when auditors rendered opinions on the financial statements of clients for whom they also provided systems consulting services and software.

I provided this testimony on behalf of ADAPSO (Association of Data Processing Service Organizations), now called ITAA (Information Technology Association of America), the oldest trade association for computer system software and services firms in the world. Because the first ten years of my business career were spent with Arthur Andersen & Co., I had strong feelings on the matter of independence and since I was President of a small software company, I served as volunteer Chairman of the ADAPSO CPA Relations Committee. The intention of the Committee was to convince the accounting firms (then the Big Eight) to stop providing software and services consulting or to sell those services through entities which were separate from and unrelated to the accounting firm partnerships -- with different names, ownership, etc.

The responses from the Big Eight were:

1. It was good for the clients to provide both kinds of services because they were more knowledgeable about a client's business and were better auditors.

2. Besides, the audit functions and consulting functions were managed separately, the people were not commingled, and, so, independence was not jeopardized.

I never could understand how they reconciled the two positions: better auditing resulted by providing consulting services to the same client and yet the two functions were separated within the firms to assure independence. And, of course, their challenge then, as now: there is no evidence of a bad audit because of these conditions. The matter of the need for the appearance of independence is simply ignored.

Although I continue to be a member of the AICPA and the Illinois CPA society, I have no podium from which to espouse strong feelings on this matter and certainly do not have examples. However, as a person with long-time concerns and as an individual member of the investing community, I continue to be concerned about the auditor/services conflict and surely by the many examples of violations of investment rules by the members of the major accounting firms -- very disappointing.

I urge you to continue to pursue these issues to seek remedies to the conditions that the accounting profession has chosen to ignore. Many of us in the investing community would be pleased to support your efforts in any way that we can. (For example, if history is of interest, I have an industry document that is a compilation of testimony, documents, and rationale supporting that testimony in 1979.)

Very truly yours,

Douglas C. Jerger
Suite 526
1600 N. Oak Street
Arlington, VA 22209

cc: Mr. Lynn Turner, Chief Accountant, Securities & Exchange Commission