September 12, 2000

The Honorable John Joseph Moakley
235 Cannon
Washington, DC 20515

Dear Mr. Moakley:

I am writing to you concerning the unnecessary proposed regulation which is being initiated by the SEC. As a director of a public accounting firm in Massachusetts, I am concerned that this proposed regulation would have a devastating effect on our clients' choices with regard to non-audit services.

Your regulations would impact our firm in potentially a number of ways. First, our national alliance, Moore Stephens, between ourselves and other accounting firms could result in each firm being required to be independent of each other firm's attest clients. Moreover, the restrictions would extend to any alliance or cooperative agreement with overseas accounting and other firms (such as legal service providers).

Secondly, in a time when the profession is having great difficulty in attracting young professionals, this regulation will have a negative effect on recruiting and retention of the best talent. Young audit professionals will not want to be at a firm where 25% - 40% of the market is "off-limits", and the same is true for the best non-audit professionals.

Thirdly, this regulation is likely to set a precedent for other regulators. Even accounting firms that do not audit SEC registrants could be impacted by these new rules. The proposed SEC rule would be viewed as the new model by the state boards of accountancy, as well as federal (i.e., 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.

And, lastly, these restrictions on non-audit services will likely have the perverse effect of undermining auditor independence by making audit firms overly or exclusively dependent on auditing fees, which would certainly be contrary to the public interest.

In conclusion, this 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 any 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.

I certainly hope that the SEC reconsiders this proposed regulation so as to ensure the future of the accounting profession.

Very truly yours,

Gerald T. Reilly & Company
Certified Public Accountants, Inc.

Thomas J. O'Connor, CPA
TJO/sg Vice President

Mr. Jonathan G. Katz, Secretary
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549-0609

Chairman Arthur Levitt
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549-0609

Commissioner Paul R. Casey
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549-0609

Commissioner Isaac C. Hunt, Jr.
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549-0609

Commissioner Laura S. Unger
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549-0609

The Honorable Edward Kennedy
U.S. Congress
315 Russell Senate Office Building
Washington, DC 20510

The Honorable John Kerry
U.S. Congress
304 Russell Senate Office Building
Washington, DC 20510

The Honorable John Joseph Moakley
235 Cannon
Washington, DC 20515