From: K.S. Bailey [KS_Bailey@msn.com]
Sent: Friday, January 25, 2002 9:50 PM
To: rule-comments@sec.gov
Subject: Independent Audits

How can an audit by a private company be independent when the parent company 
of the audit division stands to make millions each year from non-auditing 
business from the company that is being audited?  

What position is the auditor in when he reports to his parent company that a 
revenue generator is going to be "tubed" because of his audit discoveries?  

As much as I want to believe that the best interests of the public are being 
protected by an audit - I can't see the independence of an auditor when his 
parent company stands to lose millions in non-auditing revenue because of 
audit findings.  

Unfortunately, I don't have an answer.  I do believe the accounting industry 
and the government will have to work together in an unprecedented manner to 
reach a solution.  One, I'm afraid will be long in coming.  

As far as 401(k) / Retirement plans are concerned - trustees should not be 
able to totally dictate the holdings in the plan.  Company stock options 
should be limited to a conservative percentage of the plan with a well 
diversified offering of other investments available to plan participants.

Karla Bailey
Tucson  AZ