From: David Gold [dgold@parapent.com]
Sent: Monday, January 27, 2003 6:48 PM
To: rule-comments@sec.gov
Subject: File No. S7-02-03

Comment on section II. C of proposed rule regarding requirements for "The
confidential, anonymous submission by employees of the issuer of concerns
regarding questionable accounting or auditing matters".

We would strongly recommend that the SEC require companies to utilize an
independent third party organization to provide the anonymous incident
reporting system.  Such systems run internal to the company are flawed
because:
1) Employees often view them as less than anonymous...they may be seen
submitting a report or feel they may somehow be tracked in submitting the
report...and therefore fear retribution.  The result is the system becomes
ineffective as a vehicle for obtaining reports of questionable accounting or
auditing matters.
2) Third party solutions typially provide for the ability of employees to
provide their contact information to the third party while keeping it
anonymous from the company.  This provides an avenue that never exists in
internal systems to ask follow up questions of the person reporting the
incident without disclosing who that person acutally is.
3) An internal system inherently lacks independence.  Reports can be deleted
or destroyed if the person(s) receiving them are culpable with respect to
the issue being reported.  An independent third party system prevents such
tampering.