7680 Market Street
Youngstown, Ohio 44512
(330) 758-8613 PHONE
(330) 758-0357 FAX

September 22, 2000

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

Dear Mr. Katz:

Subject: Ref. File No. S7-13-00

I am writing on behalf of my partners regarding the Securities and Exchange Commission's (SEC) proposed rule that would prohibit firms which audit SEC registrants from providing non-audit services to their audit clients.

Hill, Barth & King LLC (HBK), a regional public accounting firm has 37 partners with offices in Ohio, Pennsylvania, Virginia and Florida. HBK primarily serves privately owned small to medium sized businesses; however, we also serve some public companies.

We believe the aforementioned SEC proposal could have a significant negative impact on how we serve our clients and the future operations of our firm. Some of our concerns are as follows:

1. The SEC's proposal represents a significant change to the fundamental structure of the accounting profession. This structure has served investors in an efficient and professional manner for many years and has successfully provided investors with the data they need to make informal decisions. Such a sweeping change to our profession should be studied and evaluated for a period longer than the current 75 day comment period.

2. We believe that the SEC proposed rule will be viewed as the new model by state boards of accountancy and other regulatory agencies with oversight responsibility over banking, pension plans, governmental entities, etc. As a result, this proposal will have far greater impact than only for firms who serve public companies.

3. There appears to be no evidence that non-audit services have compromised audit quality or auditor independence nor ever caused an audit failure. Furthermore, some studies have indicated that non-audit services contributed to a more effective audit. The SEC's proposed rule seems to ignore this evidence.

4. The Independence Standards Board (ISB) was established a few years ago to develop a framework for auditor independence and to implement appropriate standards. We believe the ISB should be allowed to fulfill its purpose without SEC override.

5. The new rules regarding audit committee requirements and related auditor communications recently adopted by the SEC, various stock exchanges and the ISB should be given time to work, especially since there is no evidence to indicate that providing non-audit service has resulted in a lack of audit quality.

6. HBK has developed regional alliances with other accounting firms and additional alliance agreements may be pursued in the future. We believe these alliances enable us to better serve our clients needs. The SEC's proposed rule could result in these agreements being terminated if each firm is required to be independent of each other firm's attest clients.

7. The SEC's proposed rule will have a negative impact on recruiting and retaining the best talent. The availability of outstanding professionals have decreased in recent years and we believe this trend will continue and possibly get worse. Many of our recent entry level staff have dual majors and want career opportunities in fields other than accounting and tax, such as information technology consulting and investment advisory services. We believe the "audit only" firm under the proposal will have difficulty attracting the best and brightest students because the best talent will be drawn toward industries with more diverse career opportunities.

8. The proposed rule would prohibit firms from acting as an advocate for audit clients. Our clients want us to serve them as an advocate before the Internal Revenue Service and other regulatory agencies.

Our firm was one of the first half dozen firms to voluntarily submit to peer review when the program was initiated. We have always received an unqualified peer review opinion on our system of quality control and are committed to complying with professional standards. We take seriously our profession's independence standards and the responsibility to represent the public interest. However, we believe the SEC's proposed rule will have a significant negative impact on audit quality and could have the effect of undermining auditor independence by making audit firms overly or exclusively dependent on auditing fees. If HBK was forced to decide to be an audit only firm or a non audit firm, I believe we would become a non audit firm. Consequently, we believe the SEC should not adopt the proposed rule prohibiting firms which audit SEC registrants from providing non-audit services to their audit clients.

We thank you for the opportunity to express our views on this proposed rule.


Hill, Barth & King LLC
D. Bruce Walston, Principal