U.S. Securities & Exchange Commission
SEC Seal
Home | Previous Page
U.S. Securities and Exchange Commission

Comments on Proposed Rule:
Revision of the Commission's Auditor Independence Requirements

[Release Nos. 33-7870; 34-42994; 35-27193; IC-24549; IA-1884; File No. S7-13-00]

Author: "Larry Baggs" at Internet Date: 09/09/2000 10:22 AM Normal TO: RULE-COMMENTS at 03SEC Subject: File No. 57-13-00 ------------------------------- Message Contents Hey sec: Please give us some protection that will help guarantee the integrity of information presented in company audits. I'm just a little guy reaching 50. I make under 25K and have only a few thousand in a portfolio. I pick my own stocks and try to do my own research, so I depend on the accuracy of the audits and other information out there. I almost bought Waste Management last year because of the auditor's rating. The little guy will be hurt most everytime such misleading evaluations are given because 1) we have little option to determine the truth and 2) we lack the deep pockets to protect us from what amounts to fraud. I won't have a chance at some kind of retirement/security if I am held hostage to white collar dishonesty--for that is what it is when an auditor rating a company depends on the same companies for consulting fees. It doesn't take too much common sense, regardless of what the "auditors" may be saying, to realize that their integrity is compromised at the very least or that some auditors would be downright dishonest in their evaluations of companies from whom they receive other remuneration. Larry Baggs

Author: "Fred Baldwin" at Internet Date: 09/09/2000 8:35 AM Normal TO: RULE-COMMENTS at 03SEC Subject: 57-13-00 ------------------------------- Message Contents With respect to the separation of the audit and consulting conflict of interest issue, I support the SEC. I have been a conservative investor throughout my working career. About 90% of my retirement income comes from investments. I would not consider any regulation too severe that would protect me from these predators. A young man could possibly withstand an occasional sting, but a retired person would probably have to alter his lifestyle dramatically. As an retired executive I've seen greed manifested on many levels. Apparently these kinds of crimes don't weigh heavily on the average conscience because the consequences are blurred in the distance. The consequences are however serious and real - especially with publicly traded companies in the poertfolios of retired persons. Give'em Hell! Gratefully, Fred Baldwin Anaheim Hills, California

Author: at Internet Date: 09/09/2000 12:12 PM Normal TO: RULE-COMMENTS at 03SEC Subject: Separation of Audit and Consulting functions; File No. S7-13 ------------------------------- Message Contents Gentlemen: To require service providers to establish separation between audit departments and those elements supplying consulting services does not impugn the integrity of existing companies. This requirement would remove the appearance of possible fraud and would make it more difficult for fraud to occur and could make fraud easier to detect. However; establishment by the S. E. C., of this separation would not prevent fraud. As an investor, I favor establishment of separate ownership of consulting services from the ownership of audit services but not by fiat. A first step toward a rational response to the perception of this possible problem would be to provide broad publicity. If investors become generally aware of the increased opportunities for fraud within those service providers where these functions are owned in common, it is likely that a market response separating the functions will occur. Then, if there is not a market response and if an actual fraud occurs, further rules could be considered by the S.E.C. Sincerely, F. W. Ballou 637 Fairfax Way Williamsburg, VA 23185-8204 757-220-3922 email fballou757@aol.com

Author: at Internet Date: 09/09/2000 10:52 AM Normal TO: RULE-COMMENTS at 03SEC Subject: simply put ------------------------------- Message Contents i am in favour of auditor independance and suppotrt the SEC in their efforts to make it the law.thank you for the full disclosure ruling though i have to date lost over 60% of my personal investments in the stock market the clensing of the market is indead in order .if we are to be a beacon to the world of what free enterprise can do for a free people.democercy must not only encourage the free spirit to invest but must also keep the playing field clear of posible abusises using a heavy hand to punish those who would treat its citicens with the disrespect of a carnival barker hawking fraudlent goods,services to the unwarry public.the idea of equal and free ought in my oppinion imply equal access to pertnent information when such represents no threat to national security.free ought to represent the honest sincere open choices offered to a free people baised upon the lawfull engagement of the free enterprise systen .witch can only be ensured when those who would repeddely committ acts wich violate the public trust are punished buy the loss of the right to engage in all activity withinn the financial world . thank you for your time . sorry for my long winded disertation Louis Bonaldi

Author: "stephanie" at Internet Date: 09/09/2000 10:21 AM Normal TO: RULE-COMMENTS at 03SEC Subject: I support the separating of auditing and consulting services ------------------------------- Message Contents I am an individual investor, age 49, with a strong sense of justice and fairness. From what I've read on this topic, it appears that the public is not served well when auditors collect more money from their consulting services to the same firms they audit. I hope you pursue a new rule to separate these services. I am greatful to you for the recent ruling on selective disclosure. Very truly yours, Stephanie Carleton, RN 50 Dundalk Drive Pittsburgh, PA 15235

Author: LARRY CARYL at Internet Date: 09/09/2000 11:36 AM Normal BCC: RULE-COMMENTS at 03SEC TO: rule-comments@sec.com at Internet Subject: File No. S7-13-00 ------------------------------- Message Contents For a long time I have objected to Auditing firms providing consulting services to the clients they audit. It may be impossible to prove but there is an inherent conflict of interest and Auditors should be banned from providing consulting service to their clients. Let them mess up clients they don't audit. L.G. Caryl

Author: "Jane" at Internet Date: 09/09/2000 9:34 PM Normal TO: RULE-COMMENTS at 03SEC Subject: File No. S7-13-00 ------------------------------- Message Contents Hello, I read the article on the work of the SEC sent by Fool.com, Are Auditors Independent, by Bill Barker. I would like to voice my support for the work that the SEC is doing. With investing increasing at previously unknown rates, protection is essential. Continue your work, SEC! Jane Deers

Author: "Les Dennis" at Internet Date: 09/09/2000 1:33 PM Normal TO: RULE-COMMENTS at 03SEC Subject: File No. S7-13-00 ------------------------------- Message Contents SEC: I believe that you are correct in trying to halt the practice of allowing accounting firms to both audit and consult within the same client firms. It is obvious to me that such practice would most probably lead to improprieties and/or fraud due to the human nature tendency of greed. Please go ahead and implement this new rule proposal. Lester J. dennis dennisles@earthlink.net

Author: at Internet Date: 09/09/2000 2:37 PM Normal TO: RULE-COMMENTS at 03SEC Subject: Independent auditors ------------------------------- Message Contents Dear Sirs: Anyone who has worked with an auditor realizes that under the best of circumstances the audit is apt to be compromised from the prospective of the stockholder's interest. Management too frequently has interests that are not parallel with the stockholder -- and has the working relationship with the auditor. If both the auditor and management has self-interest rather than stockholder interest at the forefront, let the stockholder beware! In my opinion, this SEC idea is right on target with this idea. I would not allow the "Independent Auditor" to have any other relationship with the Corporation. Thank you for the opportunity to make comments on proposed rules. B. L. Earle 13064 Harrisburg Court Chino, CA 91710 P.S. Am currently on a long driving trip across the country and will not be home until about Nov. 1st. Until then, e-mail is my contact.

Author: at Internet Date: 09/09/2000 1:09 PM Normal TO: RULE-COMMENTS at 03SEC Subject: File No. S7-13-00 ------------------------------- Message Contents Greetings, I've been working in business for more than twenty years now, and I know that conflicts of interest such as those between the auditing and consulting arms of a business exist. They can be managed very quietly, verbally only, where no evidence exists. I would greatly like to see auditing business separated from consulting businesses. Sincerely, Kent Erickson 54 Mystic Lake Circle Woodlands, TX 77381

Author: Mary Fink at Internet Date: 09/09/2000 10:55 AM Normal TO: RULE-COMMENTS at 03SEC Subject: S7-13-00 ------------------------------- Message Contents TO WHOM IT MAY CONCERN: As an individual investor, the numbers that I MUST rely on from various companies should be RELIABLE--not tainted by auditors whose self-interest is obvious. I encourage you to "stick to your guns" regarding this issue and be forthcoming with rules which should prevent the tainting of audits by auditors who are acting as consultants with one hand and auditors with the other. I speak for hundreds of individual investors whose only source of information often is questionable audits set forth as valid by companies who pay large sums to their auditors for "consulting services.". Thank you, Mary Fink, 320 Lightning Ranch Road, Georgetown, Tx. 78628

Author: samf at Internet Date: 09/09/2000 12:14 PM Normal TO: RULE-COMMENTS at 03SEC Subject: file no S7-13-00 -------------auditors uncompromised audits ------------------------------- Message Contents In relation to file no S7-13-00 as an individual investor i would like to see companies that audit publicly traded firms be allowed to do audits or consulting for said companies, BUT NOT BOTH. My confidence in the audits is greatly decreased by knowing that the same company is or could be doing consulting work for the company they are auditing. Please let me know that you have received this imput. Sincerely, Samuel Fleishman 6830 Hayley Ridge Way #N Baltimore, MD 21209 410.486.9778 samf@bcpl.net

Author: Reed Gelzer at Internet Date: 09/09/2000 7:36 AM Normal TO: RULE-COMMENTS at 03SEC Subject: File Number S7-13-00 ------------------------------- Message Contents Sirs/Ms.: I noted recently on the Motley Fool web site that you are looking into the conflict problems created by auditing firms that also offer consulting services. Obviously this is just one person's opinion, but this one person has approximately $600,000 of his own in the equities markets, and is co-trustee for accounts totalling another $650,000. I can tell you that after the Laidlaw and Rite-Aid messes, I greatly reduced the assurances I draw from external audits. Furthermore, I believe that the marketplace may be destabilized as investors see the deterioration of confidence in external audits-becoming even more likely to flee a stock on mere hints of financial improprieties. The stability of markets ultimately relies on some level of confidence in the honesty and fairness of the marketplace. As the weakness of the policing functions becomes more apparent, confidence erodes and, at the margins, investments are redirected. Consider for a moment what will happen to the US economy if just 2 or 3% of foreign investors shift their monies to Europe or Japan as confidence in the US equities markets erodes. The great thing about being in a policy-making function is that you only need a reasonable argument for policy, not absolute proof, to make a change. As said so well by John Bogle, founder of The Vanguard Group and index fund investing: "Of course there is no clear evidence on this subject, but [the] proposal says very aptly [that] studies cannot always confirm what common sense makes clear.... The stakes are high, and when consulting fees come to be many times more important than audit fees, it just must be obvious to anybody that independence is clearly likely to be impaired. I know it's subtle. I know it's a state of mind. But when self-interests predominate, trouble comes not far behind. And it seems to me it comes into special focus as a profession becomes a business." Best of luck in your deliberations. Reed D. Gelzer 424 N. Main St. Wallingford, CT 06492

Author: Dave Harnett at Internet Date: 09/09/2000 7:45 AM Normal TO: RULE-COMMENTS at 03SEC Subject: File No. S7-13-00. Auditing must be separate from consultin ------------------------------- Message Contents The SEC is correct in being suspicious of auditors doing consulting work for their clients. To correct the situation is easy... make an SEC rule against such practices. An Auditor must audit for a company and that's it!! Mr. Bogle of Vanguard said it all. It's just plain too suspicious to allow auditing and consulting by the same company and expect he auditor not to be PERHAPS swayed by the dollars of consulting. Auditors must be above suspiction. An independant investor thanking you for listening David Harnett 1605 Columbia Ave Port Royal SC 29935 harnett@gosiggy.com

Author: "joan harpold" at Internet Date: 09/09/2000 5:58 PM Normal TO: RULE-COMMENTS at 03SEC Subject: Auditors Objectivity ------------------------------- Message Contents To All Concerned: I have been following this subject for some time want the SEC to take all measures to insure objectivity from auditors. Please keep the public informed on all matters regarding this subject. Never before has this been of utmost importance to the individual investor. Thank you, Joan Nailling Harpold Member of NAIC

Author: "Dennis & Stacy Hartlaub" at Internet Date: 09/09/2000 10:52 AM Normal TO: RULE-COMMENTS at 03SEC Subject: Auditors need to be independent ------------------------------- Message Contents As a small investor I need to know the numbers of a public company are correct/ legal. I believe that all auditors should be independent and arm-length in all dealings with the company being audited. I also believe each and every employee of an auditing firm should own no stock in the firms being audited. Please also install strong punishment for firms breaking rules regarding public information numbers. Sincerely, Dennis Hartlaub

Author: Bob Haynes at Internet Date: 09/09/2000 3:22 PM Normal TO: RULE-COMMENTS at 03SEC Subject: Comments on Conflict of Interest in the Accounting Professio ------------------------------- Message Contents The whole concept of an accounting firm being employed by a company (I am speaking only of public companies) and giving impartial judgments concerning the company's financial status is flawed and represents a continuing conflict of interest on the part of the accounting profession. This conflict is, I believe, even more significant than the supposed conflict between accounting and consulting. If the auditing results are too negative (reflecting the reality of the company), the accounting firm will not be re-employed by the public company the following year. There have been many examples of companies changing auditing firms because they are not happy with the results. Therefore, the accounting firm is forced (in the interest of growing its business) to mollify any negative findings found during audits so as to be re-engaged next year. My solution would be as follows: Since the public company benefits from access to public funding, one of the costs of being listed on an exchange would be a payment to the exchange for annual auditing. The exchange would hire the accounting firm conducting the audit and report its results without fear that any negative reports would negatively impact its ability to be rehired next time. I believe this would eliminate the inherent conflict of interest currently extant in the world of auditing. Bob Haynes

Author: at Internet Date: 09/09/2000 2:03 PM Normal TO: RULE-COMMENTS at 03SEC Subject: File No. S7-13-00 ------------------------------- Message Contents Sir, As a small investor I wish to protest about Auditing firms performing consulting and other work, which, through generic conflict- of- interest negate the credibility of related audits. I feel these activities tend to return the markets to the pre-crash days of 1929 when it was a theme song " Heavens knows anything goes". I feel with Mr Bogle this is a sad commentary on our times. Yours Sincerely.....J.Hillan.

Author: at Internet Date: 09/09/2000 11:52 AM Normal TO: RULE-COMMENTS at 03SEC Subject: s7-13-00 ------------------------------- Message Contents It is essential that auditing be independent of the influence of money made from consulting. For the SEC to require any less defeats the very purpose of government regulation. Sincerely, Sara M. Hohe - a government lawyer and investor

Author: "Chris Jenkins" at Internet Date: 09/09/2000 1:58 PM Normal TO: RULE-COMMENTS at 03SEC Subject: Auditor Independence ------------------------------- Message Contents I am a retired audit partner with a Big 5 firm. I support your efforts to strengthen auditor independence and believe more needs to be done. If you are interested in another point of view, please contact me at this email address or at 561 219-9419. John C. Jenkins

Author: Kate Kinney at Internet Date: 09/09/2000 9:13 AM Normal TO: RULE-COMMENTS at 03SEC Subject: independent auditors ------------------------------- Message Contents In your upcoming decision about independent auditors, I, as an individual, private investor would like to offer my brief opinion. I am an independent bookkeeper and so have seen the many ways in which financial statements can be played with to make a company look like the owners want it to look. Therefore, I feel very strongly that it is your responsibility to insist on independent auditors for publicly held companies. Sincerely, Kate Kinney

Author: at Internet Date: 09/09/2000 1:31 PM Normal TO: RULE-COMMENTS at 03SEC Subject: Conflict of Interest by Auditors ------------------------------- Message Contents To Whom It May Concern, As an individual investor, I believe it is a major conflict to have auditing and consulting done at the same company by the same firm. There is too much temptation for auditors to be influenced by large consulting fees or the opportunity for large fees. We depend on totally honest auditing information to make informed investment decisions. Joe Kirby Ravens Wing Enterprises

Author: Viv & Goran at Internet Date: 09/09/2000 8:27 AM Normal TO: RULE-COMMENTS at 03SEC Subject: File No. S7-13-00 ------------------------------- Message Contents Gentlemen, I believe SEC Chairman Arthur Levitt is bringing up an extremely important issue. The mere possibility that audits may not be 100% objective is reason enough to toughen the rules and keep accounting and consulting services separate. I am a small private investor with no connections to auditing and accounting firms. The interests of people like myself should clearly take precedence over those of the accounting firms. Thank you Goran LindeOlsson 118 Stephensburg Road Port Murray, NJ 07865

Author: at Internet Date: 09/09/2000 7:25 AM Normal TO: RULE-COMMENTS at 03SEC Subject: Auditor Independence ------------------------------- Message Contents As an individual investor, I feel strongly that the SEC should pursue the goal of separating auditors' professional obligations to independently review financial statements from their business interest in representing clients as consultants. I agree with the statements made by John Bogle that raise concerns over a situation that, even without the kind of firm evidence courts would like to see, compels one to suspect a serious and inherent conflict of interest. I also wish to thank the SEC, and especially its chairman, Arthur Levitt, for so ably defending the rights of individual investors in the matter of selective disclosure. I firmly believe that such conduct on the part of the SEC goes far in maintaining public confidence in the stock market. Thank you for taking the time to read and consider my thoughts. Sincerely, Mary Beth Loup 428 Schoolers Pond Way Arnold, MD 21012

Author: "Frederick J. Martin" at Internet Date: 09/09/2000 7:53 AM Normal TO: RULE-COMMENTS at 03SEC Subject: S7-13-00 ------------------------------- Message Contents Dear Colleagues: It would be instructive to observe the present cases being examined in Europe and those of the recent past. This would allow a public case to be made for separating audits from business consulting services without disclosing protected information from settlements in U.S. courts. It would be useful for educating the electorate even though such information may be useless in court here. Some of our firms have become notorious overseas. In Germany, the joke is: KPMG stands for Keiner Prueft Mehr Genau, or they can't get it to come out right anymore. As to business factors, no business person in their right mind will give up outside audits, most especially the leaders of public companies. That business seems secure to me. The consulting business grows as more firms outsource specialist services. Today, this reaches down into personnel and finance organizations, which may be replaced entirely through outsourcing their work. I look for this to grow as more and more businesses become end-to-end electronic business enterprises. Tomorrow's CFO may not have a department to manage, just some contracts. The mixed auditor - consultant firms will not suffer unduly from having these functions separated. There is enough new business in the world to sustain them as separate entities. Frederick J. Martin Export Program Manager Anteon Corporation

Author: "Bettina B. Menzel" at Internet Date: 09/09/2000 9:07 AM Normal TO: RULE-COMMENTS at 03SEC Subject: Independence of Auditing and Consulting Services ------------------------------- Message Contents Without question, the financial company or auditor that audits a public business should be DIFFERENT from the financial company/auditor that providews that same public business consulting services. Otherwise there is a clear and undeniable conflict of interest. In the broad scheme of things, the accounting firms providing these two services will neither gain nor lose money, because these public businesses will in toto still have the same net number of audits and consultations. It is just that the service providers will be jumbled around to some extent, and for good and sufficient reason. Also, overall, American public corporations in general will benefit. A huge plus for American financial and investment markets compared to those of foreign countries is that the SEC does such a good job of keeping things honest and above-board and on the up-and-up. Investors feel safe investing in American companies. But this is no time to rest on any laurels when there is still more to be done, and something so obvious as dis-allowing an accounting business from providing both auditing and consultative services to the same publicly traded corporation. Please disallow this conflict of interest. In the long run, it is a good thing for all concerned. And thank you for banning selective disclosure. Sincerely, Bettina B. Menzel 371 TVA Road South Bristol, TN 37620-0321 bbmenzel@3wave.com (423) 878-5875

Author: at Internet Date: 09/09/2000 2:27 PM Normal TO: RULE-COMMENTS at 03SEC Subject: File No. S7-13-00 ------------------------------- Message Contents File No. S7-13-00 I support the SEC position to separate require separate consulting and auditing for public firms. Having worked in IT management at some fairly large companies, I can give you an example of a typical relevant discussion. "Management wants us to use E&Y for our IT consulting, because they want some leeway on the accounting side." I heard almost the exact same comment about Price Waterhouse, when I worked for a different company. That doesn't mean that the Big 5 firm was unduly influenced, of course, nor that the Big 5 firm did any worse job in the IT consulting than any other firm would have. But in the E&Y situation mentioned above, E&Y landed IT contracts worth millions of dollars, on a project which was ultimately cancelled. The Chairman of our firm ended up in jail, the CEO was fired, and the CIO was promoted for some reason. E&Y escaped censure, but you have to wonder if the situation would have been uncovered quicker if E&Y had not had the risk of losing a big IT contract. In summary, my experience in 2 different public firms validates the SEC's concern. ------------------------------------------- George Merkle george.merkle@omnialert.com (210) 342-6161x315

Author: at Internet Date: 09/09/2000 9:41 AM Normal TO: RULE-COMMENTS at 03SEC Subject: Auditors ------------------------------- Message Contents We feel that auditors should not have a dual interest in companies that they audit. That is, we think that auditors should not serve as advisors for companies that they audit. While there may be no clear-cut "smoking gun" to indicate that such a potential conflict of interest has often (or ever) resulted in inaccurate accounting practices, the temptation is great and should not be allowed. Yours truly, George & Virginia Meyer

Author: "Michael Miller" at Internet Date: 09/09/2000 12:52 PM Normal TO: RULE-COMMENTS at 03SEC Subject: File No. S7-13-00 ------------------------------- Message Contents To whom it may concern: It has come to my attention recently that the SEC plans to address an issue called "Auditor Independence", a title which will probably not attract the general public's attention. As an individual investor and recent student of Accounting I am extremely interested in this issue. Having begun a program in long-term equities investing recently, the Audited Reports companies are required to submit to the SEC are of the utmost importance to me. If these reports are of questionable veracity, what source of financial information is an investor to trust? From my study of current GAAP, the book's first chapter states: "...the accountant must act with integrity, even to the sacrifice of personal benefit. Integrity means that the accountant is honest and candid, and subordinates personal gain to service and the public trust. The accountant must also be Objective. Objectivity means that he or she is impartial and intellectually honest. Furthermore, the accountant must be Independent. Independence means avoiding all relationships that impair or even appear to impair the accountant's objectivity." page 26. ( Principles of Accounting seventh edition, by Needles, Powers, Mills, and Anderson). I think the word "accountant" could be substituted by "accounting firm" in the above. As I understand the situation you are investigating and attempting to control, accounting firms who are doing a company's audit are also providing for profit consulting services to the same companies. Based on the above mentioned definitions, there is no question whatever in my mind that the activities of auditing and fee based consulting must be totally separated. To not do so will almost certainly erode the public's trust in the audited financial statements of companies as listed by the SEC and will call into question the basic integrity of the accounting profession. I wish you the best in pursuing this matter, Sincerely, Michael J. Miller mailto:mmiller@sopris.net

Author: "Steph" at Internet Date: 09/09/2000 10:48 AM Normal TO: RULE-COMMENTS at 03SEC Subject: File No. S7-13-00 ------------------------------- Message Contents As you evaluate the feedback regarding the separation of accounting and consulting services, I would like to add another voice to the din. I feel strongly that the two functions should be separate and that you are correct in your pursuit of auditor independence. As an individual investor, I need to feel secure that financial information has been independently and thoroughly prepared and that it is not compromised by the lure of other business. Please continue to pursue this issue on behalf of other investors and myself. Thank you. Stephanie Olivier 3854 Montecito Avenue Santa Rosa, CA 95404 stepho@cableone.net

Author: at Internet Date: 09/09/2000 8:57 AM Normal TO: RULE-COMMENTS at 03SEC Subject: Auditor Independence ------------------------------- Message Contents I have heard that auditor consulting services are under investigation as affecting auditor independence in doing the audit. I admit that I don't trust an audit report if the auditors give a great deal of consulting service to a client. Some amount has to exist because so much inefficiency can be observed and experienced during an audit. Full disclosure is an easy start but then it gets hard. Joe Pitzinger Dallas, Texas bevers@aol.com

Author: at Internet Date: 09/09/2000 1:50 PM Normal TO: RULE-COMMENTS at 03SEC Subject: File NO. S7 - 13 - 00 ------------------------------- Message Contents Gentlemen and Ladies, I want honesty and ethics in business (and I believe we have a right to expect that) - particularly where my investments are concerned. After all I worked long and many years to garner funds for retirement such that I don't want accountants playing shell games with their audit responsibilities thus shortchanging me on information I'm using to make intelligent investment decisions . How can they possibly believe that's acceptable business behavior simply in order to protect their stake in those most attractive consulting fees? My father, who in my opinion was the savviest, most honest, intelligent accountant on the planet when he was alive, would turn over in his grave! Sincerely, Jessica M . Putney

thor: at Internet Date: 09/09/2000 9:18 AM Normal TO: RULE-COMMENTS at 03SEC Subject: File No. S7-13-00 ------------------------------- Message Contents Dear SEC: First, thank you for your ruling on the selective disclosure issue on behalf of us individual investors. I would like to add my voice in support of Auditor Independence and the problem of non-audit consulting services. Please continue your good work in support of full disclosure and transparency. Thank you, F. Rabell An individual investor

AuAuthor: "Richard Richardt" at Internet Date: 09/09/2000 1:35 PM Normal TO: RULE-COMMENTS at 03SEC CC: "Richard C Richardt" at Internet Subject: File No. S7-13-00 ------------------------------- Message Contents Dear Sirs: I hope you make Auditor Independence a reality in our business world. I can't see how auditors can have an impartial approach to a company's books if the auditing firm also has another business relationship (like consulting) with the audited company. Let's keep things fair and remove all temptation to bias on the part of the auditing firms. This is in the best interests of all investors. Rick Richardt rcrichardt@dellnet.com

Author: at Internet Date: 09/09/2000 10:34 AM Normal TO: RULE-COMMENTS at 03SEC Subject: File S7-13-00 ------------------------------- Message Contents I, for one small investor, have wondered about this issue. However, I have never heard of it being addressed before. Thank you for your efforts to keep investing in the markets more open and fair. Sincerely, Joy Des Rosier

Author: Melvyn Schupack at Internet Date: 09/09/2000 9:20 AM Normal TO: RULE-COMMENTS at 03SEC Subject: File # S7-13-00 ------------------------------- Message Contents As an individual investor I urge that you provied for full auditor independence by separating accounting firms from consulting firms. There is a clear conflict of interest between the two functions and we need assurance of a complete separation of the two. Please act before even one case surfaces with incontrovertible evidence since then it will be much to late and that would be only the too-late tip of the iceberg. Since, as I understand it, most cases are settled out of court and records sealed, it will be important to act now to protect all investors. Thank you. Sincerely, Mel Schupack, MD

Author: Kathryn E Sheffer at Internet Date: 09/09/2000 7:12 AM Normal TO: RULE-COMMENTS at 03SEC Subject: File No. S7-13-00 ------------------------------- Message Contents We have a first hand example here in Arizona where the Arizona Baptist Foundation is in the throws of trying to clean up the mess that was allowed because the 'big 8' accounting firm doing the audit 'didn't' or 'couldn't' keep all the things straight. A lot of people are losing life savings and IRAs and a lot of lawyers are getting fat fees because of this mess. If the audits had been done correctly, I don't believe the Foundation could have pulled this off. But, it happened and now a lot of little people are hurting. I don't know what, if any, consulting fees were paid to the accounting firm, but the whole thing smells to me. Kathryn Sheffer Computer Library, Inc. www.computerlibrary.com

Author: at Internet Date: 09/09/2000 7:37 AM Normal TO: RULE-COMMENTS at 03SEC Subject: Comment on File number S7-13-00 ------------------------------- Message Contents Dear Sir: I have been reading about a situation that exists which could have very serious consequences for all of us. That being that accounting and consulting done by the same firm on certain publicly traded companies is possibly. compromising the integrity of the audit side of the equation. This of course could have devastating consequences if it gets out of hand. We all understand the human nature and the temptation of an accounting firm to put a profit ahead of other responsibilities is entirely possible. I want to tell you that I hope there is something the SEC can do to try to guarantee that the public and the investors are protected here. Possibly requiring the use of two firms and not two firms owned by the same entity to perform the accounting and consulting. In any case I support your efforts to remedy this situation and wish you the best of luck in your endeavors. Sincerely, Bill Shreck Pullet1 @ aol.com

Author: Elizabeth Smith at Internet Date: 09/09/2000 9:33 AM Normal TO: RULE-COMMENTS at 03SEC Subject: S7-13-00 ------------------------------- Message Contents To members of the SEC; Thank you for the opportunity to comment on the subject of auditors' relations with the companies being audited. I am a very small investor who has no business experience , but I have become interested in investing in my retirement. My small portfolio has done very well due to this longrunning economic boom but I realize one must research one's choices extensively. The lessons and philosphy of The Motley Fool have been helpful. Their recommendation is to study the numbers; but if the numbers are not completely reliable, we're in trouble. In my work life, I dealt with a national consulting firm of auditors which was hired to assess the most efficient way for a department to meet it's client's needs. That department was outsourced and ,surprise! the auditing firm's subsidiary was chosen for the contract. This experience has led me to some skepticism about the ability of such firms to fully separate their lines of business. I hope you will continue to support rules which will result in truly accurate information from auditors. Thanks for all your good work. Sincerely, Elizabeth B.Smith.

Author: "Kathy_Sullivan" at Internet Date: 09/09/2000 10:35 AM Normal TO: RULE-COMMENTS at 03SEC Subject: File No. S7-13-00 ------------------------------- Message Contents I would like to add my comments to the Auditor Independence discussion that is currently under review. I am an individual investor, both of stocks and mutual funds. It is imperative above all, that financial audits of companies be as thorough and free from any outside influence or conflict as possible. I wholeheartedly support a new rule that would bar accounting and consulting firms from providing these services to the same companies that they are also auditing. Thank you for your taking the time to consider my opinion. Sincerely, Kathleen Sullivan 12747 Regal Pine Lane Houston, TX 77070

Author: K at Internet Date: 09/09/2000 10:30 AM Normal TO: RULE-COMMENTS at 03SEC TO: vice.president@whitehouse.gov at Internet Subject: Strangle To: Arthur Levitt "Quandry on Information availabil ------------------------------- Message Contents As an individual investor, I am finding that information about the market and economics is pretty much kept secret by large institutional handshake deals with big business until the value of the information is no longer an edge... then it is made available via the normal distribution paths. (Journals, TV, AP, UP) Which is just tooooo late. Is timelyness a commodity for the rich only??? Noooooooooooo. As examples: 1. Inexpensive stock market Real Time Volume is not generally available. Why??? Price too, but not as difficult to find. Internet solutions are needed. 2. Common point and time of distribution of real time factual information that affects the market is needing to be dealt with. I would like equal access to Govt reports, earnings warnings, company/industry specific market moving news. (perhaps distributed during non market hours on govt news wire, non biased tv channels etc ). Heres an idea...... whisper numbers wouldnt be wisper numbers if the information was allowed to be presented all along by non licensed writers as "forward looking discussion." Let concensus build. Wheres freedom of press?? And Yes, fraud is punishable, but not until the crime is commited. The current SEC rules appear to have a bias to suppress forward looking information and support only historical information. (Arguable but is preception) eg. licensed vs free press. I would argue that suppression of forward looking information and discussion is "real bad". I would propose that the information being distributed state that it is "forward looking" and that it is presented as discussion only, this is for anybody not just CEOs and licensed brokers. I am concerned for the individual investor who doesnt have the vast resources to research the future by himself (being that he/she probably has a day job, kids etc). This is all a major problem for at least two reasons....... 1. If 25% of social security will be individually investable.....under the current SEC system they will loose it. This is contridictory to the goal of retirement wealth. 2. Unless information is freed up Capitolism will be lead by a Dictatorship of a few brokerage institutions who control it, and this is not good. For example note when a brokerage house makes a determination of ....... Did/didnt meet expectations and the stock price is quickly adjusted..... there was no shareholder consensus here, and what about undue influence. Yeah this is a problem that needs attention. The truth shall ring loud and clear around the world. Please help to create a better America. Thanks Kevin Surber 1726 C Ave NE Cedar Rapids, Ia 52402 319-247-2707

Author: "Richard J. Svertz" at Internet Date: 09/09/2000 8:03 AM Normal TO: RULE-COMMENTS at 03SEC Subject: File No. S7-13-00 ------------------------------- Message Contents I am very concerned about auditor independence. How can a firm which reaps huge profits in consulting fees from a corporation give the same corporation an unbiased audit? Please pursue this with all diligence. Thank you for protecting the individual investor, Richard J. Svertz

Author: "Thayer; Bruce (B.P.)" at Internet Date: 09/09/2000 1:19 PM Normal TO: RULE-COMMENTS at 03SEC Subject: S7-13-00 ------------------------------- Message Contents Dear SEC, I just read about the "Auditor Independence" regulation that the SEC is pursuing. I just want to voice my opinion that I support the position the SEC has taken. An auditor with any other vested interest in, or business with, a company they audit cannot be expected to be totally unbiased. As an individual investor, I believe the SEC is absolutely correct in taking action to protect the investing public that stands to lose so much due to corporate greed and the power to hide, or fail to disclose, the kinds of things an independent auditor is charged with finding and revealing. Please continue to pursue this regulatory action. Sincerely, Bruce Thayer

Author: "Paul Tucci" at Internet Date: 09/09/2000 11:05 AM Normal TO: RULE-COMMENTS at 03SEC Subject: S7-13-00 ------------------------------- Message Contents I am writing in to express my opposition to the proposed SEC rule prohibiting non-audit services to CPA firm's attest clients. My office serves smaller SEC registrants who require considerable assistance in order to comply with the SEC reporting rules. The rule proposed by the SEC will significantly impact our ability to provide this service which benefits the SEC, the client and the investing public. Small registrants, such as our clients do not have the financial resources to hire the experts necessary to comply with the myriad regulations provided by the SEC and other regulators. They rely on the CPA firm to assist them in these matters and complying with the regulations. Segregating the audit function and other relationships needed to comply with regulations will be a next to impossible task for these small businesses. CPA firms will refuse to provide audit services or require significant fee increases because of inefficiencies caused by these regulations. These rules will create a burden on small registrants and ultimately the investing public, who the SEC is assigned to protect. Please note my strong opposition to this pointless rule. Very truly yours, Paul T. Tucci

Author: "Ken Updegrave" at Internet Date: 09/09/2000 7:29 AM Normal TO: RULE-COMMENTS at 03SEC Subject: File No. S7-13-00 ------------------------------- Message Contents As an investor and a North Carolina CPA, I think that the independence issues for auditors do become very blurred when the auditing firm does consulting engagements for the same client. When a firm has an interest in both engagements it is difficult to have objectivity and independence in fact and appearance. Ken Updegrave 1225 Chaney Road Raleigh, NC 27606 (919)-852-0253

Author: at Internet Date: 09/09/2000 12:15 PM Normal TO: RULE-COMMENTS at 03SEC Subject: File No S7-13-00 ------------------------------- Message Contents As an individual investor in the US stock market, I feel strongly that Auditors should be independent from consultant services. I am a retired engineer, and cannot believe that auditors would be strictly independent if consulting fees could be at risk. The consulting business, whether accounting, engineering or other professions is built around "Good Ol' Boy" networks and Auditors should be independent of this influence. James D. Walker 823 Valence St. New Orleans, LA 70115

Author: "James Walterhouse" at Internet Date: 09/09/2000 2:04 PM Normal TO: RULE-COMMENTS at 03SEC Subject: File No. S7-13-00 ------------------------------- Message Contents Dear Sir or Madam, As an individual investor in the stock market, I feel it is of utmost importance that auditing and consulting services be separated. Not to do so is akin to leaving the fox to guard the henhouse. I fully support and applaud all efforts in this direction. Furthermore I would like to express my appreciation for the recent disclosures mandate that eliminated the advantage that institutions had over individual investors in obtaining news pertaining to the financial decisions and health of the publicly traded companies in which we invest. Sincerely, James D. Walterhouse 1101 E. Pecan Blvd. #55 McAllen, TX. 78501

Author: Brian Williams at Internet Date: 09/09/2000 12:09 PM Normal TO: RULE-COMMENTS at 03SEC Subject: File No. S7-13-00 ------------------------------- Message Contents My comment on the proposed rule concerning auditor independence: Though there may not be any cases demonstrating a compromised audit due to consulting activities for the same client, ordinary human experience indicates that such relationships are ripe for hidden, maybe unconscious, abuse. This is why most professions have rules prohibiting even the appearance of a conflict of interest. Doesn't the auditing profession have such rules? Don't they perceive this as the appearance of a conflict? I certainly do, and I believe most ordinary people would agree. Pass the rule. -- Brian Williams Experience is what you get when you didn't get what you wanted.

Author: Ed and Carole at Internet Date: 09/09/2000 11:56 AM Normal TO: RULE-COMMENTS at 03SEC Subject: "File No. S7-13-00" ------------------------------- Message Contents I strongly support rule making that would require separation of auditing functions and consulting functions. I don't believe it is possible to fully trust audit reports prepared by firms with a consulting relationship to the firm being audited. Edward D Williamson Investor

Author: ernie yap at Internet Date: 09/09/2000 8:00 AM Normal TO: RULE-COMMENTS at 03SEC Subject: keep accounting and consulting services seperate ------------------------------- Message Contents I just finished reading the Motley's Fool's article about keeping accounting and consulting services seperate. My vote goes to doing just that. Sincerely, Ernie Yap