Date:    09/20/2000  8:55 AM

Subject: Proposed SEC Rule

     
I would like to take this opportunity to write to strongly object to the 
proposed SEC rules on the regulation of the accounting industry (SEC file 
S7-13-00). Evidence is clear that this new regulation would severely and 
unnecessarily curtail the ability of CPAs to provide non-audit services to their
clients. The "ripple effect" that this regulation could have on non-SEC clients 
would be most damaging to sole practitioners and small CPA firms. As a CPA, I 
see first hand the benefits that I provide my clients as a result of our audit 
work. In a rush to impose additional regulation on the accounting industry, the 
SEC has missed the following significant points:
     
1. There is no evidence whatsoever that non-audit services provided to audit 
clients has hindered audit quality or independence. To the contrary, the Panel 
on Audit Effectiveness formed by the Public Oversight Board of the SEC found 
that these non-audit services had a positive effect on audit quality;
     
2. These rules could actually have a negative impact on auditors' independence, 
as firms would become overly reliant on audit fees;
     
3. As stated previously, the impact that the proposed rules would have on other 
regulatory bodies could do significant harm to smaller CPA firms and sole 
practitioners. As a result, competition (and audit quality) would diminish 
considerably.
     
In conclusion, I know personally that my role as auditor has helped me immensely
when it comes to providing value-added advice to my clients concerning internal 
control, financial reporting, and business processes, all things that serve to 
protect the public's interest by making sure that our capital markets are the 
best-functioning in the free world. I also take pride in the high ethical 
standards of my profession, standards that would continue to be upheld without 
this needless and draconian legislation.
     
Sincerely,
     
John J. Stolte