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: "James C. Anderson" at Internet
Date: 09/09/2000 1:11 PM
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TO: RULE-COMMENTS at 03SEC
Subject: File No. S7-13-00
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Regarding this issue, I put my trust in the expertise of the SEC which is
commissioned to act in the interests of the American people. The potential for
organizations which offer consulting and auditing services to affect reports to
misrepresent fiscal results should be considered. The SEC is in the position to
have knowledge of such conflicts and to cause such rulings as may be needed to
prevent them. For this reason I encourage the Commissioner's to rule according
to the evidence as it is known to them.
Best regards,
James C. Anderson
Private Investor
Tucson, AZ.
Author: "John Brown" at Internet
Date: 09/09/2000 3:58 PM
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TO: RULE-COMMENTS at 03SEC
Subject: S7-13-00
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Don't settle and seal the record. You stand between us (the investors) and the
auditors. You look over their shoulder to see what is going on.. STAND FIRM.
This is what goverment is for to make a level playing field.
John Brown
711 N. Lakeview Dr.
Rogers,Ar. 72756-3033
Author: Charles Campbell at Internet
Date: 09/09/2000 3:48 PM
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TO: RULE-COMMENTS at 03SEC
Subject: File No. -13 -00
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Dear Sir:
Regarding the separation of auditor duties from
for the same company, I think that this would he
be one more way of keeping the company reports
free from wrong influence and give more credit
to the report.
Charles L. Campbell
Author: Jim Ferguson at Internet
Date: 09/09/2000 1:45 PM
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Subject: File NO. S7-13-00
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Gentlemen:
I am a small invester getting my investing feet wet with my company's 401K Plan
and some selected on-line investing. After reading my latest Motley Fool email
here's my take on the issue of separating auditing and consulting revenue
streams in accounting firms..
It's a "no brainer". Any time in my business experience, when self interest and
ethics collide...the opportunity for a decision favoring self-interest is real
and all too probable. Why should you continue to allow even the hint of
impropieity...given the risks to the investment community. The combined
lobbying of the big accounting firms is substantial, but the SEC has an
obligation to follow a course of simple common sense. Separate these two
functions. Keep all us out here sleeping at night knowing that the financial
summaries you require are accurate to a fault and any conclusions reached as the
a firm's financial conditions are true and unbiased by other relationships. The
SEC's job is to keep the honest people honest..maintain your reputation and stay
the course.
James A. Ferguson
Plano, Texas.
Author: "Michael Gauthier" at Internet
Date: 09/09/2000 5:40 PM
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TO: RULE-COMMENTS at 03SEC
Subject: File No. S7-13-00
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To Whom it may concern,
My name is Mike Gauthier, I am an individual investor in the stock
market.
I feel very strongly that the Auditors Independence rule is in the best
interest of the public, and indirectly therefore publicly traded business.
To allow any financial information to be undisclosed, altered, or
"forgotten" due to the companies willingness to purchase consulting services
is unacceptable. Thank you for your time.
Sincerely
Michael J. Gauthier A+, CCDA, CCNA, MCSE+I, Network+
mgauthier@dotnet.com
Tel. (920) 477-5881
Fax (920) 477-3406
Author: "Guckes; Terry" at Internet
Date: 09/09/2000 6:46 PM
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Receipt Requested
TO: RULE-COMMENTS at 03SEC
Subject: Separation of Accounting and Consulting Services
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Gentlemen:
I hope you make and enforce rules completely separating accounting
and consulting services, so that a firm can choose to do one or the other
but not both.
Regards,
Terry Guckes
Author: "George H Haas" at Internet
Date: 09/09/2000 2:29 PM
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TO: RULE-COMMENTS at 03SEC
Subject: Auditor independence
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I believe that one of the big differences between the US financial markets and
other financial markets is that you can believe most of the financial data
presented.
There is the possibility that other business considerations by auditing firms
could taint the unbiased reporting of the auditors. The audit divisions should
at least be made to be in separate divisions of the company if not completely
independent. A perceived conflict of interest is almost as bad as an actual
conflict of interest.
G.H.Haas
Author: at Internet
Date: 09/09/2000 3:35 PM
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Subject: File No. S7-13-00
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I encourage you to make it illegal for the "independent auditor" to have
any part of its corporate entity doing business with the company being
audited.
Ron Homan
Author: "Don & Nancy" at Internet
Date: 09/09/2000 2:53 PM
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TO: RULE-COMMENTS at 03SEC
Subject: S7-13-00
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Auditing and consulting for a fee is a major conflict of interest.
No public confidence should be given to any report of any firm that engages
in this practice.
Vivian D. Kilgore Jr.
Author: MARTIN_BEN at Internet
Date: 09/09/2000 1:52 PM
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Subject: File No. S7-13-00
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Gentlemen,
As in individual investor I need up-to-date, accurate, complete and unbiased
accounting reports from corporations and funds. Therefore I wholeheartedly
support your pursuit of Auditor Independence. We all must be able to trust
the audit reports and ensuring their independence will go a long way toward
achieving that goal.
Thank you,
-- Ben Martin
Author: "J. Marty" at Internet
Date: 09/09/2000 7:18 PM
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TO: RULE-COMMENTS at 03SEC
Subject: File No. S7-13-00
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Gentlemen:
As a Certified Public Accountant for 31 years and a very active auditor for
the first six years, I would like the SEC to ardently pursue a rule
prohibiting auditors from performing consulting engagements for audit
clients.
To the discredit of the accounting profession, it has moved from a
profession to a marketing oriented "practice" or business and away from a
"service profession".
I personally believe that, in part, unrestrained litigation has caused large
accounting firms to de-emphasize the practice of effective auditing
techniques, relying instead on analytic review and enhancing income from
audit services, consulting and tax services to "fill" their warchests to
defend themselves against inevitable litigation and the resulting costs of
defense and settle-ment. Other firms have been forced to follow in order
compete with the "predator" bids of the larger firms with the staff to
perform extensive consulting engagements.
It is a sad state of affairs.
If the practice of "cross-selling" of services were constrained, it may
cause a renewed emphasis on effective auditing and, thereby, enhance the
reliability of audited financial statements and protect the investing
public. Considera-tion should also be given to limiting court awards to
documented damages plus the cost of prosecution. If allowed to remain,
punitive damages should be limited to a reasonable percentage of documented
damages.
Very truly yours,
John L. Marty, CPA
Author: at Internet
Date: 09/09/2000 4:24 PM
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TO: RULE-COMMENTS at 03SEC
CC: DONMYR@aol.com at Internet
Subject: File No. S7-13-00
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To Whom It May Concern:
I am for the addition of restrictions on the provision of both Auditing and
Systems Consulting Services for any corporation by the same company (i.e. one
of the FAB FIVE). The potential for economic pressure on a corporation by
an auditing comp;any not only puts the company at a possible disadvantage,
but may also place the stockholders in a position of having no representation.
Sincerely,
Don Meyer
Author: "Clarence Munson Jr." at Internet
Date: 09/09/2000 5:53 PM
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TO: RULE-COMMENTS at 03SEC
Subject: S7-13-00
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As an investor I strongly support S-13-00 for obvious reasons.
Clarence Munson
P.O. Box 128
Oneonta,NY 13820
Author: at Internet
Date: 09/09/2000 9:12 PM
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TO: RULE-COMMENTS at 03SEC
Subject: auditors and/vs consultants
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i wish to add my feelings and name to those who have already advises you that
those who advise should not be the ones who do the audits. there is too great
an opportunity for conflict of interest.
sam ortenberg samort@aol.com
Author: Mike Di Paolo at Internet
Date: 09/09/2000 5:49 PM
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TO: RULE-COMMENTS at 03SEC
Subject: Audits
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Yes, I believe auditing firms can be swayed if they also do consulting.
Businesses that do auditing should not also do consulting. This is
necessary if the public is to have condidence in the audit.
Mike Di Paolo
29 Cargill Drive
Bella Vista, AR 72715
501 855 0998
Author: at Internet
Date: 09/09/2000 11:09 AM
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TO: RULE-COMMENTS at 03SEC
Subject: File No. S7-13-00 & the SEC
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I want to thank the SEC for their past efforts at "leveling the playing
field" for the smaller, individual investor. Your consistent efforts at
making access to information available to all investors at the same time
is a great policy.
Consistent with that policy is making accountants adhere to a higher
ethical standard, by separating them from the consulting function. I'm
cynical enough about politics and large corporations, and really tired of
"accounting irregularities" as being part of an investment strategy to
find companies that have been devalued.
While my thoughts are not well thought out on the subject, I would like
to extend to the Commission my support and thanks for their efforts.
Sincerely,
Rick Percoco
16 Lark St.,
Greenwich, NY 12834
Author: at Internet
Date: 09/09/2000 8:57 PM
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TO: RULE-COMMENTS at 03SEC
Subject: file# S7-13-00
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GENTLEMEN IT SEEMS ONCE AGIN AN AGENCY IS IN THE POSITION OF KNOWING WHAT THE
RIGHT ACTION TO TAKE IS,AND ONCE AGIN IT SKIRTS
AROUND THE CORE OF THE ISSUE AS A DELAYING TACTIC,, GENTLEMEN --
DO THE RIGHT THING. SINCERLY
JAMES PICALIA
Author: at Internet
Date: 09/09/2000 10:00 PM
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Subject: File No. S7-13-00
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Dear Sir/Madam:
I believe that the SEC should stringently and
sharply investigate the practice of the large accounting
firms' practice of not only providing auditing services to
companies but also consulting services.
At the present time, as well as the recent past, the increasing
presence of auditing companies also providing consulting
services present a conflict of interest that hurt investors and would
be investors. A company providing both auditing and cosulting
services may and sometimes do find it in their best interest to make
recommendations and consultation advice that is adverse to
the individual investor and the potential investor.
I believe a puissant and serious investigation into this
disturbing practice is carried out.
Sincerely,
Jeffrey Renye
Author: Jim Rice at Internet
Date: 09/09/2000 5:40 PM
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TO: RULE-COMMENTS at 03SEC
Subject: File No. S7-13-00
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It is my opinion, as an individual investor, that it is important:
1. That the previous work done by the SEC for the selective disclosure
issue is a great benefit to the individual investor
2. I likewise believe Auditor Independence should be as high a
priority, even though it will be exteremely challenging to publicly
demonstrate the extent of the problem.
3. It is my belief that there is also potential conflict of interest in
these Auditor Consulting firms continuing to remain unbiased in
representing consulting services advice to their customers when they are
receiveing monetary benefit from equity ownership in high-tech software
companies. (e.g. [Nasd:STCS] equity ownership by companies including AC,
EDS, & SAIC)
Thank you,
Jim Rice
Author: at Internet
Date: 09/09/2000 5:53 PM
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TO: RULE-COMMENTS at 03SEC
Subject: Auditors vs. Consultants
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I would like to comment that I believe that firms should not be allowed to
consult for firms that they audit. I believe that there is an inherent
conflict of interest therein. Furthermore, I believe that this is one of
those areas whereby the markets should want transparency and should want to
set guidelines that the public could understand as "beyond reproach". As
auditors are professionals, they should be held to the same standard as
judges that from to time excuse themselves from cases, or attorneys that cite
conflict of interest in doing the same.
It would be one thing for a firm to perform these services for different
clients. For an accounting firm to perform audit services and consulting
services for the same firm, this is an apparent conflict of interest. I
would think that an accounting firm would want to avoid even the appearance
of a conflict of interest. Therefore, I cannot understand why a prominent
firm would oppose this rule.
Yours truly,
Elliot M. Simon
Author: "Whitcomb" at Internet
Date: 09/09/2000 3:56 PM
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TO: RULE-COMMENTS at 03SEC
Subject: "File No. S7-13-00"
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As an individual invester I depend on unbiased accounting procedures. I
support your initiative to make company auditors independant.
Thank you,
Dennis Whitcomb
416 Roswell Rd apt NN4
Atlanta GA 30342
http://www.sec.gov/rules/proposed/s71300/0909b02.htm
