From: jr [jr@sbcglobal.net]
Sent: Sunday, December 22, 2002 12:07 AM
Subject: File No. S7-49-02

I am very concerned that the proposed rules on auditor
independence which will require rotation of all partners on an
audit engagement will have the unintended result of greatly
increasing audit risk and lead to less effective audits.

Clearly, much must be done to restore investor confidence and
increase corporate responsibility.  The partner rotation
requirements contained in the Sarbanes-Oxley Act (i.e., the lead
and concurring partners) is a well thought out approach.

Auditors must possess an in-depth knowledge of a company's
business and industry in order to conduct effective audits.   The
extensive partner rotation contemplated in the SEC's proposed
rules will result in less competent audits.  On complex
engagements, it is common for an "engagement partner" to be on
the audit for several years before assuming the "lead partner"
role.  During this time, the partner is obtaining the in-depth
understanding of the business/industry necessary to serve as a
"lead" partner.   The SEC's proposed rules would prevent this
from occurring

Also, today's large (Fortune 1000) companies often have numerous
lines of businesses in many different locations.    Audit firms
should staff these divisions with partners who have the best
industry knowledge and accounting expertise to audit the
division.  The extensive partner rotation included in the SEC's
proposed rules would likely result in less competent audits--
partners are not "fungible" (i.e, they have different skill sets)
and many firms will simply not have the resources in all
locations to best serve the client.    While the firm will deploy
a resource to serve the division, it may not be the very best
resource that the firm has available and risk will be increased.

Recent market events and the demise of Andersen has put audit
firms on notice as to what happens when they don't fulfill their
responsibility to the public; however, the SEC should not
institute rules that hamper the audit firms' ability to best
audit its clients and serve the public.

Please reconsider your position so that it is consistent with
that included in the Sarbanes-Oxley Act--that is, only require
rotation of the lead partner ("signing partner") and concurring
partner.

Thank you.