Subject: File No. PCAOB-2004-03
From: Mike J Barcikowski

May 17, 2004

Mr. Jonathan G. Katz, Secretary
Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549-0609

Dear Mr. Katz:

The Securities Exchange Commission is in a unique position to fulfill the mandate of the Sarbanes-Oxley Act by enacting File No. PCAOB-2004-03 release No. 34-49544: Public Company Accounting Oversight Board Notice of Filing of Proposed Rule on Auditing Standard No. 2, An Audit of Internal Control Over Financial reporting in Conjunction with an Audit of Financial Statements as proposed.

Voluntary self-governance has unfortunately proven to be incapable of providing the necessary checks and balances that the periodic unraveling of confidence in financial markets seem to experience due to the abuses of a few notable registrants. The proposed standard facilitates a long overdue corrective action that is necessitated by many registrants lack of a complete and fundamental internal control structure within their organizations. Long established audit standards with specific requirements have not been complied with in the past. The notion that imposition of the Standard impedes the financial performance of a registrant should be readily dismissed. The opportunity for business process reengineering and process improvement are the value adds that should be acted upon immediately and vigorously as an outcome of the internal control assessment process and performed in parallel. Minor technical clarifications should not impede the standards adoption.

It certainly is true as others have asserted that there is a considerable cost associated with compliance, testing of assertions and that the timelines are extremely challenging. The cost is not trivial yet many features of a compliant and appropriate internal control structure should have been operationally effective years prior to Sarbanes-Oxley. There is a portion which is non-recurring that must be absorbed to facilitate a proper internal control level and recurring audit fees should stabilize once an internal control structure throughout an enterprise has achieved standardization. The escalation of audit fees and the quantum leap in associated costs of compliance is unacceptable and must be addressed in industry forums and other venues.

The establishment by the PCAOB of the Auditing Internal Control Implementation Issues Working Group assures a continuous dialogue that will address evolving issues and concerns.

Thank you for the opportunity to comment on the proposed standard. Please contact me for any further clarification or information you may deem necessary at 720 849-0014.

Sincerely, Mike Barcikowski
Statistical Dynamics