Date:    9/17/98  10:09 AM


September 16, 1998
     
     
Mr. Jonathan G. Katz
Secretary
Securities and Exchange Commission
450 5th Street, NW
Washington, DC 20549-6009
     
    
     
RE: File No. S7-16-98
     
     
Dear Mr. Katz:
     
The  Financial  Reporting  Committee  (FRC)  of the Institute of Management 
Accountants  appreciates  this  opportunity  to comment on the Commission?s 
proposed  amendment  to  Rule 102(e) of the Commission?s Rules of Practice, 
albeit  belatedly.   The release of the proposed amendment and the close of 
the  related  comment period fell between the regular quarterly meetings of 
the  FRC.   However, the proposed rule is of such fundamental importance to 
our  organization,  the  FRC respectfully requests its comments be accepted 
and considered by the Commission.
     
The Institute of Management Accountants is the largest organization in this 
country   devoted   exclusively  to  management  accounting  and  financial 
management   professionals,   with   approximately   80,000  members.   Our 
membership  encompasses accountants drawn from every area of the accounting 
profession  including  business  and industry, public accounting, academia, 
and government.
     
The  FRC  supports  the Commission?s general position that an accountant or 
other  professional  practicing before the Commission who intentionally and 
knowingly  violates  professional  standards  in  a  reckless way should be 
subject  to  disciplinary  action  by  the  Commission.   However,  the FRC 
strongly  disagrees  with the proposed rule in that application of the rule 
as  presently  written could construe errors of judgement or simple acts of 
negligence  to  be ?improper professional conduct? and therefore subject to 
punitive  disciplinary  action.   The  FRC also strongly disagrees with the 
proposed rule in that accountants have been unfairly singled out.
     
These  and  other equally important issues have already been commented upon 
in  the  comment  letters  submitted by the American Institute of Certified 
Public  Accountants and by the Financial Executives Institute.  Rather than 
repeat  similar comments here, the FRC would simply like to go on record as 
supporting the letters submitted by these two organizations.
     
We would be happy to further discuss with you the views of our organization 
on this very important matter.
     
     
Very truly yours,
     
/s/ John J. Perrell III
Chair