From: Jeffrey S. Gilbert [res00ht7@gte.net]
Sent: Saturday, January 11, 2003 6:45 PM
To: rule-comments@sec.gov
Subject: S7-49-02

The following relates to the question of whether small firms or sole
practioners as a class of practicing auditors have been excluded from
continuing to provide audit services to public companies?   Are sole
practioners out of business?



Re: Strengthening…Auditor Independence:

The provision prohibiting partners on audit engagements from providing
audit services to the issuer for more than five consecutive years
effectively elements the class of sole practioners from providing audit
services.  The sole practioner’s ability to offer audit services would
be limited to five years and at that time another unrelated audit firm
would have to be engaged by the issuer.  This puts the sole practioner
at a competitive disadvantage in maintaining existing issuers as clients
and in attempting to add issuers as audit clients.  There has to be an
accommodation to this class of auditor in the regulations to allow for
sole practioners to maintian a public auditing practice.  A suggestion
would be to tier issuers and to exempt from the rotation requirements
the small capitalized non- listed issuers.

The measure of audit engagement partner time for the determination of
the five-year rule should begin at the issuance of the regulations and
it should not look back to past history prior to the signing of
Sarbanes-Oxley (ex-post facto?).  This will provide a transition time
for sole practioners to look for alternatives if sole practioners have
been excluded from public auditing.


General:

What constituents an independent reviewer?  If a sole practioner
utilizes contract services for the independent reviewer function, is the
independent reviewer required to register with the PCAOB, if their firm
is not part of the PCAOB?


Thank you,

Jeffrey S. Gilbert, C.P.A.