September 18, 2000
Mr. Jonathan G. Katz
Secretary
Securities and Exchange Commission
450 Fifth Street, NW
Washington,DC 20549-0609
Dear Mr. Katz:
I read with alarm the proposed Securities Exchange Commission (SEC) regulation "Revision of the Commission's Auditor Independence Requirements; Proposed Rule, 65 Fed. 43, 148 (2000)," (the proposal). My opinion is offered during the comment period for the proposal expiring September 25, 2000. I am an audit partner in a full service local CPA firm of 50 professionals in downtown Atlanta, GA. I firmly believe the proposal, as currently written, is unwarranted, not supported by facts, or requested by the financial and business. Non-audit services offered by audit firms simply have not compromised auditor independence or audit failure. The following matters support my position concerning the proposal.
- Audit firms have an excellent history, awareness, and attitude of maintaining, observing, and adhering to the Independence Rules. Audit firms are well aware of the Independence Rules in regard to non-audit services offered by audit firms.
- I cannot see a problem concerning audit firms violating the Independence Rules as they relate to non-audit services. What facts and circumstances were used to determine that the "Scope of Services" offered by audit firms has resulted in substandard engagements through financial and auditing standards violations? I believe the number of substandard engagements, if any, do not support the dramatic change relevant to the "Scope of Services" offered by audit firms.
- In the last 10 annual reports to Congress, the SEC has not mentioned any concerns regarding the "Scope of Services" offered by audit firms. Where has this concern originated?
- It appears to me that the SEC has ignored the conclusions of the SEC's Panel of Audit Effectiveness of the Public Oversight Board. This SEC-appointed panel concluded, "both the profession and the quality of audits are fundamentally sound." The Panel did not find any evidence that the provision of non-audit services hurt audit quality. The Panel did note that "in numerous instances non-audit services contributed to a more effective audit." As an audit partner, I support that view.
Mr. Jonathan G. Katz
Securities and Exchange Commission
Page Two
September 18, 2000
- The proposal greatly restricts the ability of the public to benefit from the knowledge possessed by audit firms. The financial and business community will be forced to undertake highly inefficient and costly time and expense to procure needed non-audit services from those that simply do not have the knowledge and understanding possessed by an audit firm. This will hurt the business owners and cost them more in total professional fees.
- The proposal does clearly state the proposal "would not effect tax-related services" provided by audit firms to audit clients. The proposal references strictly compliance services provided by audit firms to audit clients. It would prohibit an audit firm from acting as an advocate for an audit client, providing expert service in administrative proceedings, and logically prohibiting audit firms from representing audit clients before the Internal Revenue Service.
- The proposal would create a negative effect on the ability of audit firms to recruit and retain the best talent. Professionals would not be interested in or challenged to work with firms in which 25% - 40% of the current market for firms would not open to them to practice. The CPA Vision Project touts the profession as attracting more well-rounded business professionals that can also perform consultative services to our clients.
- The impact to all audit firms, regardless of having SEC audit clients or not, will be dramatic.
Other regulators will use the proposal, if adopted, as a model. This "model" will be used as by state boards of accountancy, other federal regulators, i.e., banking and ERISA areas of audit practice, and other regulators. The proposal will have impact to the regulatory approach to auditor independence outside of the United States.
The significance of this impact requires the SEC to reconsider the timing of the proposal due to the following:
- The 75 day comment period is entirely too short to permit meaningful and timely public input. This short comment period does not permit collecting and analyzing the great deal of data required and to offer meaningful and viable alternatives for regulating the "Scope of Services" offered by audit firms.
- Three years ago the SEC set up the ISB. I believe the work of the ISB is being completely pre-empted. The ISB as originally charged by the SEC was to develop new concepts and framework regarding auditor independence and related implementation.
Mr. Jonathan G. Katz
Securities and Exchange Commission
Page Three
September 18, 2000
- Recently, the ISB, NYSE, NASD, American Stock Exchange, and the SEC have adopted new disclosure and audit committee requirements. The proposal and its timetable have not given enough time for those requirements to mature and work.
In addition, I challenge the authority of the SEC in regard to this "Scope of Services" rule. The authority cited by the SEC, in the proposal pertain to the filing of public companies' financial statements that have been audited by independent audit firms. This authority does not provide for the making of rules that govern and regulate the audit profession itself. I also question any proposal, which permits an agency of government the ability to control the services offered by any business, or control the services procured by any business. This clearly is not in the best interest of the financial and business community, or the general public.
Lastly, the proposal is a fundamental change to one of the most fundamental and observed rules of the audit profession. The history of auditors providing independent and reliable financial information to the public, investors, and other interested readers is indeed long and well documented for over one century and does not require any change at this time.
I firmly believe this proposal should not be implemented. Your time and consideration of this communication is appreciated.
Very truly yours,
Ruth A. Bartlett, CPA
Partner, Frazier & Deeter, LLC
Member, AICPA Council
Past President – Ga. Society of CPAs
RAB:"
K:\rab022\SECletter.091500.doc
September 18, 2000
Chairman Arthur Levitt
Securities and Exchange Commission
450 Fifth Street, NW
Washington,DC 20549-0609
Dear Chairman Levitt:
I read with alarm the proposed Securities Exchange Commission (SEC) regulation "Revision of the Commission's Auditor Independence Requirements; Proposed Rule, 65 Fed. 43, 148 (2000)," (the proposal). My opinion is offered during the comment period for the proposal expiring September 25, 2000. I am an audit partner in a full service local CPA firm of 50 professionals in downtown Atlanta, GA. I firmly believe the proposal, as currently written, is unwarranted, not supported by facts, or requested by the financial and business. Non-audit services offered by audit firms simply have not compromised auditor independence or audit failure. The following matters support my position concerning the proposal.
- Audit firms have an excellent history, awareness, and attitude of maintaining, observing, and adhering to the Independence Rules. Audit firms are well aware of the Independence Rules in regard to non-audit services offered by audit firms.
- I cannot see a problem concerning audit firms violating the Independence Rules as they relate to non-audit services. What facts and circumstances were used to determine that the "Scope of Services" offered by audit firms has resulted in substandard engagements through financial and auditing standards violations? I believe the number of substandard engagements, if any, do not support the dramatic change relevant to the "Scope of Services" offered by audit firms.
- In the last 10 annual reports to Congress, the SEC has not mentioned any concerns regarding the "Scope of Services" offered by audit firms. Where has this concern originated?
- It appears to me that the SEC has ignored the conclusions of the SEC's Panel of Audit Effectiveness of the Public Oversight Board. This SEC-appointed panel concluded, "both the profession and the quality of audits are fundamentally sound." The Panel did not find any evidence that the provision of non-audit services hurt audit quality. The Panel did note that "in numerous instances non-audit services contributed to a more effective audit." As an audit partner, I support that view.
Chairman Arthur Levitt
Securities and Exchange Commission
Page Two
September 18, 2000
- The proposal greatly restricts the ability of the public to benefit from the knowledge possessed by audit firms. The financial and business community will be forced to undertake highly inefficient and costly time and expense to procure needed non-audit services from those that simply do not have the knowledge and understanding possessed by an audit firm. This will hurt the business owners and cost them more in total professional fees.
- The proposal does clearly state the proposal "would not effect tax-related services" provided by audit firms to audit clients. The proposal references strictly compliance services provided by audit firms to audit clients. It would prohibit an audit firm from acting as an advocate for an audit client, providing expert service in administrative proceedings, and logically prohibiting audit firms from representing audit clients before the Internal Revenue Service.
- The proposal would create a negative effect on the ability of audit firms to recruit and retain the best talent. Professionals would not be interested in or challenged to work with firms in which 25% - 40% of the current market for firms would not open to them to practice. The CPA Vision Project touts the profession as attracting more well-rounded business professionals that can also perform consultative services to our clients.
- The impact to all audit firms, regardless of having SEC audit clients or not, will be dramatic.
Other regulators will use the proposal, if adopted, as a model. This "model" will be used as by state boards of accountancy, other federal regulators, i.e., banking and ERISA areas of audit practice, and other regulators. The proposal will have impact to the regulatory approach to auditor independence outside of the United States.
The significance of this impact requires the SEC to reconsider the timing of the proposal due to the following:
- The 75 day comment period is entirely too short to permit meaningful and timely public input. This short comment period does not permit collecting and analyzing the great deal of data required and to offer meaningful and viable alternatives for regulating the "Scope of Services" offered by audit firms.
- Three years ago the SEC set up the ISB. I believe the work of the ISB is being completely pre-empted. The ISB as originally charged by the SEC was to develop new concepts and framework regarding auditor independence and related implementation.
Chairman Arthur Levitt
Securities and Exchange Commission
Page Three
September 18, 2000
- Recently, the ISB, NYSE, NASD, American Stock Exchange, and the SEC have adopted new disclosure and audit committee requirements. The proposal and its timetable have not given enough time for those requirements to mature and work.
In addition, I challenge the authority of the SEC in regard to this "Scope of Services" rule. The authority cited by the SEC, in the proposal pertain to the filing of public companies' financial statements that have been audited by independent audit firms. This authority does not provide for the making of rules that govern and regulate the audit profession itself. I also question any proposal, which permits an agency of government the ability to control the services offered by any business, or control the services procured by any business. This clearly is not in the best interest of the financial and business community, or the general public.
Lastly, the proposal is a fundamental change to one of the most fundamental and observed rules of the audit profession. The history of auditors providing independent and reliable financial information to the public, investors, and other interested readers is indeed long and well documented for over one century and does not require any change at this time.
I firmly believe this proposal should not be implemented. Your time and consideration of this communication is appreciated.
Very truly yours,
Ruth A. Bartlett, CPA
Partner, Frazier & Deeter, LLC
Member, AICPA Council
Past President – Ga. Society of CPAs
RAB:"
K:\rab022\SECletter.091500.doc
September 18, 2000
Commissioner Paul R. Casey
Securities and Exchange Commission
450 Fifth Street, NW
Washington,DC 20549-0609
Dear Commissioner Casey:
I read with alarm the proposed Securities Exchange Commission (SEC) regulation "Revision of the Commission's Auditor Independence Requirements; Proposed Rule, 65 Fed. 43, 148 (2000)," (the proposal). My opinion is offered during the comment period for the proposal expiring September 25, 2000. I am an audit partner in a full service local CPA firm of 50 professionals in downtown Atlanta, GA. I firmly believe the proposal, as currently written, is unwarranted, not supported by facts, or requested by the financial and business. Non-audit services offered by audit firms simply have not compromised auditor independence or audit failure. The following matters support my position concerning the proposal.
- Audit firms have an excellent history, awareness, and attitude of maintaining, observing, and adhering to the Independence Rules. Audit firms are well aware of the Independence Rules in regard to non-audit services offered by audit firms.
- I cannot see a problem concerning audit firms violating the Independence Rules as they relate to non-audit services. What facts and circumstances were used to determine that the "Scope of Services" offered by audit firms has resulted in substandard engagements through financial and auditing standards violations? I believe the number of substandard engagements, if any, do not support the dramatic change relevant to the "Scope of Services" offered by audit firms.
- In the last 10 annual reports to Congress, the SEC has not mentioned any concerns regarding the "Scope of Services" offered by audit firms. Where has this concern originated?
- It appears to me that the SEC has ignored the conclusions of the SEC's Panel of Audit Effectiveness of the Public Oversight Board. This SEC-appointed panel concluded, "both the profession and the quality of audits are fundamentally sound." The Panel did not find any evidence that the provision of non-audit services hurt audit quality. The Panel did note that "in numerous instances non-audit services contributed to a more effective audit." As an audit partner, I support that view.
Commissioner Paul R. Casey
Securities and Exchange Commission
Page Two
September 18, 2000
- The proposal greatly restricts the ability of the public to benefit from the knowledge possessed by audit firms. The financial and business community will be forced to undertake highly inefficient and costly time and expense to procure needed non-audit services from those that simply do not have the knowledge and understanding possessed by an audit firm. This will hurt the business owners and cost them more in total professional fees.
- The proposal does clearly state the proposal "would not effect tax-related services" provided by audit firms to audit clients. The proposal references strictly compliance services provided by audit firms to audit clients. It would prohibit an audit firm from acting as an advocate for an audit client, providing expert service in administrative proceedings, and logically prohibiting audit firms from representing audit clients before the Internal Revenue Service.
- The proposal would create a negative effect on the ability of audit firms to recruit and retain the best talent. Professionals would not be interested in or challenged to work with firms in which 25% - 40% of the current market for firms would not open to them to practice. The CPA Vision Project touts the profession as attracting more well-rounded business professionals that can also perform consultative services to our clients.
- The impact to all audit firms, regardless of having SEC audit clients or not, will be dramatic.
Other regulators will use the proposal, if adopted, as a model. This "model" will be used as by state boards of accountancy, other federal regulators, i.e., banking and ERISA areas of audit practice, and other regulators. The proposal will have impact to the regulatory approach to auditor independence outside of the United States.
The significance of this impact requires the SEC to reconsider the timing of the proposal due to the following:
- The 75 day comment period is entirely too short to permit meaningful and timely public input. This short comment period does not permit collecting and analyzing the great deal of data required and to offer meaningful and viable alternatives for regulating the "Scope of Services" offered by audit firms.
- Three years ago the SEC set up the ISB. I believe the work of the ISB is being completely pre-empted. The ISB as originally charged by the SEC was to develop new concepts and framework regarding auditor independence and related implementation.
Commissioner Paul R. Casey
Securities and Exchange Commission
Page Three
September 18, 2000
- Recently, the ISB, NYSE, NASD, American Stock Exchange, and the SEC have adopted new disclosure and audit committee requirements. The proposal and its timetable have not given enough time for those requirements to mature and work.
In addition, I challenge the authority of the SEC in regard to this "Scope of Services" rule. The authority cited by the SEC, in the proposal pertain to the filing of public companies' financial statements that have been audited by independent audit firms. This authority does not provide for the making of rules that govern and regulate the audit profession itself. I also question any proposal, which permits an agency of government the ability to control the services offered by any business, or control the services procured by any business. This clearly is not in the best interest of the financial and business community, or the general public.
Lastly, the proposal is a fundamental change to one of the most fundamental and observed rules of the audit profession. The history of auditors providing independent and reliable financial information to the public, investors, and other interested readers is indeed long and well documented for over one century and does not require any change at this time.
I firmly believe this proposal should not be implemented. Your time and consideration of this communication is appreciated.
Very truly yours,
Ruth A. Bartlett, CPA
Partner, Frazier & Deeter, LLC
Member, AICPA Council
Past President – Ga. Society of CPAs
RAB:"
K:\rab022\SECletter.091500.doc
September 18, 2000
Commissioner Isaac C. Hunt, Jr.
Securities and Exchange Commission
450 Fifth Street, NW
Washington,DC 20549-0609
Dear Commissioner Hunt:
I read with alarm the proposed Securities Exchange Commission (SEC) regulation "Revision of the Commission's Auditor Independence Requirements; Proposed Rule, 65 Fed. 43, 148 (2000)," (the proposal). My opinion is offered during the comment period for the proposal expiring September 25, 2000. I am an audit partner in a full service local CPA firm of 50 professionals in downtown Atlanta, GA. I firmly believe the proposal, as currently written, is unwarranted, not supported by facts, or requested by the financial and business. Non-audit services offered by audit firms simply have not compromised auditor independence or audit failure. The following matters support my position concerning the proposal.
- Audit firms have an excellent history, awareness, and attitude of maintaining, observing, and adhering to the Independence Rules. Audit firms are well aware of the Independence Rules in regard to non-audit services offered by audit firms.
- I cannot see a problem concerning audit firms violating the Independence Rules as they relate to non-audit services. What facts and circumstances were used to determine that the "Scope of Services" offered by audit firms has resulted in substandard engagements through financial and auditing standards violations? I believe the number of substandard engagements, if any, do not support the dramatic change relevant to the "Scope of Services" offered by audit firms.
- In the last 10 annual reports to Congress, the SEC has not mentioned any concerns regarding the "Scope of Services" offered by audit firms. Where has this concern originated?
- It appears to me that the SEC has ignored the conclusions of the SEC's Panel of Audit Effectiveness of the Public Oversight Board. This SEC-appointed panel concluded, "both the profession and the quality of audits are fundamentally sound." The Panel did not find any evidence that the provision of non-audit services hurt audit quality. The Panel did note that "in numerous instances non-audit services contributed to a more effective audit." As an audit partner, I support that view.
Commissioner Isaac C. Hunt, Jr.
Securities and Exchange Commission
Page Two
September 18, 2000
- The proposal greatly restricts the ability of the public to benefit from the knowledge possessed by audit firms. The financial and business community will be forced to undertake highly inefficient and costly time and expense to procure needed non-audit services from those that simply do not have the knowledge and understanding possessed by an audit firm. This will hurt the business owners and cost them more in total professional fees.
- The proposal does clearly state the proposal "would not effect tax-related services" provided by audit firms to audit clients. The proposal references strictly compliance services provided by audit firms to audit clients. It would prohibit an audit firm from acting as an advocate for an audit client, providing expert service in administrative proceedings, and logically prohibiting audit firms from representing audit clients before the Internal Revenue Service.
- The proposal would create a negative effect on the ability of audit firms to recruit and retain the best talent. Professionals would not be interested in or challenged to work with firms in which 25% - 40% of the current market for firms would not open to them to practice. The CPA Vision Project touts the profession as attracting more well-rounded business professionals that can also perform consultative services to our clients.
- The impact to all audit firms, regardless of having SEC audit clients or not, will be dramatic.
Other regulators will use the proposal, if adopted, as a model. This "model" will be used as by state boards of accountancy, other federal regulators, i.e., banking and ERISA areas of audit practice, and other regulators. The proposal will have impact to the regulatory approach to auditor independence outside of the United States.
The significance of this impact requires the SEC to reconsider the timing of the proposal due to the following:
- The 75 day comment period is entirely too short to permit meaningful and timely public input. This short comment period does not permit collecting and analyzing the great deal of data required and to offer meaningful and viable alternatives for regulating the "Scope of Services" offered by audit firms.
- Three years ago the SEC set up the ISB. I believe the work of the ISB is being completely pre-empted. The ISB as originally charged by the SEC was to develop new concepts and framework regarding auditor independence and related implementation.
Commissioner Isaac C. Hunt, Jr.
Securities and Exchange Commission
Page Three
September 18, 2000
- Recently, the ISB, NYSE, NASD, American Stock Exchange, and the SEC have adopted new disclosure and audit committee requirements. The proposal and its timetable have not given enough time for those requirements to mature and work.
In addition, I challenge the authority of the SEC in regard to this "Scope of Services" rule. The authority cited by the SEC, in the proposal pertain to the filing of public companies' financial statements that have been audited by independent audit firms. This authority does not provide for the making of rules that govern and regulate the audit profession itself. I also question any proposal, which permits an agency of government the ability to control the services offered by any business, or control the services procured by any business. This clearly is not in the best interest of the financial and business community, or the general public.
Lastly, the proposal is a fundamental change to one of the most fundamental and observed rules of the audit profession. The history of auditors providing independent and reliable financial information to the public, investors, and other interested readers is indeed long and well documented for over one century and does not require any change at this time.
I firmly believe this proposal should not be implemented. Your time and consideration of this communication is appreciated.
Very truly yours,
Ruth A. Bartlett, CPA
Partner, Frazier & Deeter, LLC
Member, AICPA Council
Past President – Ga. Society of CPAs
RAB:"
K:\rab022\SECletter.091500.doc
September 18, 2000
Commissioner Laura S. Unger
Securities and Exchange Commission
450 Fifth Street, NW
Washington,DC 20549-0609
Dear Commissioner Unger:
I read with alarm the proposed Securities Exchange Commission (SEC) regulation "Revision of the Commission's Auditor Independence Requirements; Proposed Rule, 65 Fed. 43, 148 (2000)," (the proposal). My opinion is offered during the comment period for the proposal expiring September 25, 2000. I am an audit partner in a full service local CPA firm of 50 professionals in downtown Atlanta, GA. I firmly believe the proposal, as currently written, is unwarranted, not supported by facts, or requested by the financial and business. Non-audit services offered by audit firms simply have not compromised auditor independence or audit failure. The following matters support my position concerning the proposal.
- Audit firms have an excellent history, awareness, and attitude of maintaining, observing, and adhering to the Independence Rules. Audit firms are well aware of the Independence Rules in regard to non-audit services offered by audit firms.
- I cannot see a problem concerning audit firms violating the Independence Rules as they relate to non-audit services. What facts and circumstances were used to determine that the "Scope of Services" offered by audit firms has resulted in substandard engagements through financial and auditing standards violations? I believe the number of substandard engagements, if any, do not support the dramatic change relevant to the "Scope of Services" offered by audit firms.
- In the last 10 annual reports to Congress, the SEC has not mentioned any concerns regarding the "Scope of Services" offered by audit firms. Where has this concern originated?
- It appears to me that the SEC has ignored the conclusions of the SEC's Panel of Audit Effectiveness of the Public Oversight Board. This SEC-appointed panel concluded, "both the profession and the quality of audits are fundamentally sound." The Panel did not find any evidence that the provision of non-audit services hurt audit quality. The Panel did note that "in numerous instances non-audit services contributed to a more effective audit." As an audit partner, I support that view.
Commissioner Laura S. Unger
Securities and Exchange Commission
Page Two
September 18, 2000
- The proposal greatly restricts the ability of the public to benefit from the knowledge possessed by audit firms. The financial and business community will be forced to undertake highly inefficient and costly time and expense to procure needed non-audit services from those that simply do not have the knowledge and understanding possessed by an audit firm. This will hurt the business owners and cost them more in total professional fees.
- The proposal does clearly state the proposal "would not effect tax-related services" provided by audit firms to audit clients. The proposal references strictly compliance services provided by audit firms to audit clients. It would prohibit an audit firm from acting as an advocate for an audit client, providing expert service in administrative proceedings, and logically prohibiting audit firms from representing audit clients before the Internal Revenue Service.
- The proposal would create a negative effect on the ability of audit firms to recruit and retain the best talent. Professionals would not be interested in or challenged to work with firms in which 25% - 40% of the current market for firms would not open to them to practice. The CPA Vision Project touts the profession as attracting more well-rounded business professionals that can also perform consultative services to our clients.
- The impact to all audit firms, regardless of having SEC audit clients or not, will be dramatic.
Other regulators will use the proposal, if adopted, as a model. This "model" will be used as by state boards of accountancy, other federal regulators, i.e., banking and ERISA areas of audit practice, and other regulators. The proposal will have impact to the regulatory approach to auditor independence outside of the United States.
The significance of this impact requires the SEC to reconsider the timing of the proposal due to the following:
- The 75 day comment period is entirely too short to permit meaningful and timely public input. This short comment period does not permit collecting and analyzing the great deal of data required and to offer meaningful and viable alternatives for regulating the "Scope of Services" offered by audit firms.
- Three years ago the SEC set up the ISB. I believe the work of the ISB is being completely pre-empted. The ISB as originally charged by the SEC was to develop new concepts and framework regarding auditor independence and related implementation.
Commissioner Laura S. Unger
Securities and Exchange Commission
Page Three
September 18, 2000
- Recently, the ISB, NYSE, NASD, American Stock Exchange, and the SEC have adopted new disclosure and audit committee requirements. The proposal and its timetable have not given enough time for those requirements to mature and work.
In addition, I challenge the authority of the SEC in regard to this "Scope of Services" rule. The authority cited by the SEC, in the proposal pertain to the filing of public companies' financial statements that have been audited by independent audit firms. This authority does not provide for the making of rules that govern and regulate the audit profession itself. I also question any proposal, which permits an agency of government the ability to control the services offered by any business, or control the services procured by any business. This clearly is not in the best interest of the financial and business community, or the general public.
Lastly, the proposal is a fundamental change to one of the most fundamental and observed rules of the audit profession. The history of auditors providing independent and reliable financial information to the public, investors, and other interested readers is indeed long and well documented for over one century and does not require any change at this time.
I firmly believe this proposal should not be implemented. Your time and consideration of this communication is appreciated.
Very truly yours,
Ruth A. Bartlett, CPA
Partner, Frazier & Deeter, LLC
Member, AICPA Council
Past President – Ga. Society of CPAs
RAB:"
K:\rab022\SECletter.091500.doc
September 18, 2000
Senator Max Cleland
75 Spring Street
Suite 1700
Atlanta,GA 30303
Dear Senator Cleland:
I read with alarm the proposed Securities Exchange Commission (SEC) regulation "Revision of the Commission's Auditor Independence Requirements; Proposed Rule, 65 Fed. 43, 148 (2000)," (the proposal). My opinion is offered during the comment period for the proposal expiring September 25, 2000. I am an audit partner in a full service local CPA firm of 50 professionals in downtown Atlanta, GA. I firmly believe the proposal, as currently written, is unwarranted, not supported by facts, or requested by the financial and business. Non-audit services offered by audit firms simply have not compromised auditor independence or audit failure. The following matters support my position concerning the proposal.
- Audit firms have an excellent history, awareness, and attitude of maintaining, observing, and adhering to the Independence Rules. Audit firms are well aware of the Independence Rules in regard to non-audit services offered by audit firms.
- I cannot see a problem concerning audit firms violating the Independence Rules as they relate to non-audit services. What facts and circumstances were used to determine that the "Scope of Services" offered by audit firms has resulted in substandard engagements through financial and auditing standards violations? I believe the number of substandard engagements, if any, do not support the dramatic change relevant to the "Scope of Services" offered by audit firms.
- In the last 10 annual reports to Congress, the SEC has not mentioned any concerns regarding the "Scope of Services" offered by audit firms. Where has this concern originated?
- It appears to me that the SEC has ignored the conclusions of the SEC's Panel of Audit Effectiveness of the Public Oversight Board. This SEC-appointed panel concluded, "both the profession and the quality of audits are fundamentally sound." The Panel did not find any evidence that the provision of non-audit services hurt audit quality. The Panel did note that "in numerous instances non-audit services contributed to a more effective audit." As an audit partner, I support that view.
Senator Max Cleland
Page Two
September 18, 2000
- The proposal greatly restricts the ability of the public to benefit from the knowledge possessed by audit firms. The financial and business community will be forced to undertake highly inefficient and costly time and expense to procure needed non-audit services from those that simply do not have the knowledge and understanding possessed by an audit firm. This will hurt the business owners and cost them more in total professional fees.
- The proposal does clearly state the proposal "would not effect tax-related services" provided by audit firms to audit clients. The proposal references strictly compliance services provided by audit firms to audit clients. It would prohibit an audit firm from acting as an advocate for an audit client, providing expert service in administrative proceedings, and logically prohibiting audit firms from representing audit clients before the Internal Revenue Service.
- The proposal would create a negative effect on the ability of audit firms to recruit and retain the best talent. Professionals would not be interested in or challenged to work with firms in which 25% - 40% of the current market for firms would not open to them to practice. The CPA Vision Project touts the profession as attracting more well-rounded business professionals that can also perform consultative services to our clients.
- The impact to all audit firms, regardless of having SEC audit clients or not, will be dramatic.
Other regulators will use the proposal, if adopted, as a model. This "model" will be used as by state boards of accountancy, other federal regulators, i.e., banking and ERISA areas of audit practice, and other regulators. The proposal will have impact to the regulatory approach to auditor independence outside of the United States.
The significance of this impact requires the SEC to reconsider the timing of the proposal due to the following:
- The 75 day comment period is entirely too short to permit meaningful and timely public input. This short comment period does not permit collecting and analyzing the great deal of data required and to offer meaningful and viable alternatives for regulating the "Scope of Services" offered by audit firms.
- Three years ago the SEC set up the ISB. I believe the work of the ISB is being completely pre-empted. The ISB as originally charged by the SEC was to develop new concepts and framework regarding auditor independence and related implementation.
Senator Max Cleland
Page Three
September 18, 2000
- Recently, the ISB, NYSE, NASD, American Stock Exchange, and the SEC have adopted new disclosure and audit committee requirements. The proposal and its timetable have not given enough time for those requirements to mature and work.
In addition, I challenge the authority of the SEC in regard to this "Scope of Services" rule. The authority cited by the SEC, in the proposal pertain to the filing of public companies' financial statements that have been audited by independent audit firms. This authority does not provide for the making of rules that govern and regulate the audit profession itself. I also question any proposal, which permits an agency of government the ability to control the services offered by any business, or control the services procured by any business. This clearly is not in the best interest of the financial and business community, or the general public.
Lastly, the proposal is a fundamental change to one of the most fundamental and observed rules of the audit profession. The history of auditors providing independent and reliable financial information to the public, investors, and other interested readers is indeed long and well documented for over one century and does not require any change at this time.
I firmly believe this proposal should not be implemented. Your time and consideration of this communication is appreciated.
Very truly yours,
Ruth A. Bartlett, CPA
Partner, Frazier & Deeter, LLC
Member, AICPA Council
Past President – Ga. Society of CPAs
RAB:"
K:\rab022\SECletter.091500.doc
September 18, 2000
Senator Zell Miller
100 Colony Square, Suite 300
1175 Peachtree Street, NE
Atlanta,GA 30361
Dear Senator Miller:
I read with alarm the proposed Securities Exchange Commission (SEC) regulation "Revision of the Commission's Auditor Independence Requirements; Proposed Rule, 65 Fed. 43, 148 (2000)," (the proposal). My opinion is offered during the comment period for the proposal expiring September 25, 2000. I am an audit partner in a full service local CPA firm of 50 professionals in downtown Atlanta, GA. I firmly believe the proposal, as currently written, is unwarranted, not supported by facts, or requested by the financial and business. Non-audit services offered by audit firms simply have not compromised auditor independence or audit failure. The following matters support my position concerning the proposal.
- Audit firms have an excellent history, awareness, and attitude of maintaining, observing, and adhering to the Independence Rules. Audit firms are well aware of the Independence Rules in regard to non-audit services offered by audit firms.
- I cannot see a problem concerning audit firms violating the Independence Rules as they relate to non-audit services. What facts and circumstances were used to determine that the "Scope of Services" offered by audit firms has resulted in substandard engagements through financial and auditing standards violations? I believe the number of substandard engagements, if any, do not support the dramatic change relevant to the "Scope of Services" offered by audit firms.
- In the last 10 annual reports to Congress, the SEC has not mentioned any concerns regarding the "Scope of Services" offered by audit firms. Where has this concern originated?
- It appears to me that the SEC has ignored the conclusions of the SEC's Panel of Audit Effectiveness of the Public Oversight Board. This SEC-appointed panel concluded, "both the profession and the quality of audits are fundamentally sound." The Panel did not find any evidence that the provision of non-audit services hurt audit quality. The Panel did note that "in numerous instances non-audit services contributed to a more effective audit." As an audit partner, I support that view.
Senator Zell Miller
Page Two
September 18, 2000
- The proposal greatly restricts the ability of the public to benefit from the knowledge possessed by audit firms. The financial and business community will be forced to undertake highly inefficient and costly time and expense to procure needed non-audit services from those that simply do not have the knowledge and understanding possessed by an audit firm. This will hurt the business owners and cost them more in total professional fees.
- The proposal does clearly state the proposal "would not effect tax-related services" provided by audit firms to audit clients. The proposal references strictly compliance services provided by audit firms to audit clients. It would prohibit an audit firm from acting as an advocate for an audit client, providing expert service in administrative proceedings, and logically prohibiting audit firms from representing audit clients before the Internal Revenue Service.
- The proposal would create a negative effect on the ability of audit firms to recruit and retain the best talent. Professionals would not be interested in or challenged to work with firms in which 25% - 40% of the current market for firms would not open to them to practice. The CPA Vision Project touts the profession as attracting more well-rounded business professionals that can also perform consultative services to our clients.
- The impact to all audit firms, regardless of having SEC audit clients or not, will be dramatic.
Other regulators will use the proposal, if adopted, as a model. This "model" will be used as by state boards of accountancy, other federal regulators, i.e., banking and ERISA areas of audit practice, and other regulators. The proposal will have impact to the regulatory approach to auditor independence outside of the United States.
The significance of this impact requires the SEC to reconsider the timing of the proposal due to the following:
- The 75 day comment period is entirely too short to permit meaningful and timely public input. This short comment period does not permit collecting and analyzing the great deal of data required and to offer meaningful and viable alternatives for regulating the "Scope of Services" offered by audit firms.
- Three years ago the SEC set up the ISB. I believe the work of the ISB is being completely pre-empted. The ISB as originally charged by the SEC was to develop new concepts and framework regarding auditor independence and related implementation.
Senator Zell Miller
Page Three
September 18, 2000
- Recently, the ISB, NYSE, NASD, American Stock Exchange, and the SEC have adopted new disclosure and audit committee requirements. The proposal and its timetable have not given enough time for those requirements to mature and work.
In addition, I challenge the authority of the SEC in regard to this "Scope of Services" rule. The authority cited by the SEC, in the proposal pertain to the filing of public companies' financial statements that have been audited by independent audit firms. This authority does not provide for the making of rules that govern and regulate the audit profession itself. I also question any proposal, which permits an agency of government the ability to control the services offered by any business, or control the services procured by any business. This clearly is not in the best interest of the financial and business community, or the general public.
Lastly, the proposal is a fundamental change to one of the most fundamental and observed rules of the audit profession. The history of auditors providing independent and reliable financial information to the public, investors, and other interested readers is indeed long and well documented for over one century and does not require any change at this time.
I firmly believe this proposal should not be implemented. Your time and consideration of this communication is appreciated.
Very truly yours,
Ruth A. Bartlett, CPA
Partner, Frazier & Deeter, LLC
Member, AICPA Council
Past President – Ga. Society of CPAs
RAB:"
K:\rab022\SECletter.091500.doc
September 18, 2000
Representative John Lewis
343 Cannon
Washington,DC 20515
Dear Representative Lewis:
I read with alarm the proposed Securities Exchange Commission (SEC) regulation "Revision of the Commission's Auditor Independence Requirements; Proposed Rule, 65 Fed. 43, 148 (2000)," (the proposal). My opinion is offered during the comment period for the proposal expiring September 25, 2000. I am an audit partner in a full service local CPA firm of 50 professionals in downtown Atlanta, GA. I firmly believe the proposal, as currently written, is unwarranted, not supported by facts, or requested by the financial and business. Non-audit services offered by audit firms simply have not compromised auditor independence or audit failure. The following matters support my position concerning the proposal.
- Audit firms have an excellent history, awareness, and attitude of maintaining, observing, and adhering to the Independence Rules. Audit firms are well aware of the Independence Rules in regard to non-audit services offered by audit firms.
- I cannot see a problem concerning audit firms violating the Independence Rules as they relate to non-audit services. What facts and circumstances were used to determine that the "Scope of Services" offered by audit firms has resulted in substandard engagements through financial and auditing standards violations? I believe the number of substandard engagements, if any, do not support the dramatic change relevant to the "Scope of Services" offered by audit firms.
- In the last 10 annual reports to Congress, the SEC has not mentioned any concerns regarding the "Scope of Services" offered by audit firms. Where has this concern originated?
- It appears to me that the SEC has ignored the conclusions of the SEC's Panel of Audit Effectiveness of the Public Oversight Board. This SEC-appointed panel concluded, "both the profession and the quality of audits are fundamentally sound." The Panel did not find any evidence that the provision of non-audit services hurt audit quality. The Panel did note that "in numerous instances non-audit services contributed to a more effective audit." As an audit partner, I support that view.
Representative John Lewis
Page Two
September 18, 2000
- The proposal greatly restricts the ability of the public to benefit from the knowledge possessed by audit firms. The financial and business community will be forced to undertake highly inefficient and costly time and expense to procure needed non-audit services from those that simply do not have the knowledge and understanding possessed by an audit firm. This will hurt the business owners and cost them more in total professional fees.
- The proposal does clearly state the proposal "would not effect tax-related services" provided by audit firms to audit clients. The proposal references strictly compliance services provided by audit firms to audit clients. It would prohibit an audit firm from acting as an advocate for an audit client, providing expert service in administrative proceedings, and logically prohibiting audit firms from representing audit clients before the Internal Revenue Service.
- The proposal would create a negative effect on the ability of audit firms to recruit and retain the best talent. Professionals would not be interested in or challenged to work with firms in which 25% - 40% of the current market for firms would not open to them to practice. The CPA Vision Project touts the profession as attracting more well-rounded business professionals that can also perform consultative services to our clients.
- The impact to all audit firms, regardless of having SEC audit clients or not, will be dramatic.
Other regulators will use the proposal, if adopted, as a model. This "model" will be used as by state boards of accountancy, other federal regulators, i.e., banking and ERISA areas of audit practice, and other regulators. The proposal will have impact to the regulatory approach to auditor independence outside of the United States.
The significance of this impact requires the SEC to reconsider the timing of the proposal due to the following:
- The 75 day comment period is entirely too short to permit meaningful and timely public input. This short comment period does not permit collecting and analyzing the great deal of data required and to offer meaningful and viable alternatives for regulating the "Scope of Services" offered by audit firms.
- Three years ago the SEC set up the ISB. I believe the work of the ISB is being completely pre-empted. The ISB as originally charged by the SEC was to develop new concepts and framework regarding auditor independence and related implementation.
Representative John Lewis
Page Three
September 18, 2000
- Recently, the ISB, NYSE, NASD, American Stock Exchange, and the SEC have adopted new disclosure and audit committee requirements. The proposal and its timetable have not given enough time for those requirements to mature and work.
In addition, I challenge the authority of the SEC in regard to this "Scope of Services" rule. The authority cited by the SEC, in the proposal pertain to the filing of public companies' financial statements that have been audited by independent audit firms. This authority does not provide for the making of rules that govern and regulate the audit profession itself. I also question any proposal, which permits an agency of government the ability to control the services offered by any business, or control the services procured by any business. This clearly is not in the best interest of the financial and business community, or the general public.
Lastly, the proposal is a fundamental change to one of the most fundamental and observed rules of the audit profession. The history of auditors providing independent and reliable financial information to the public, investors, and other interested readers is indeed long and well documented for over one century and does not require any change at this time.
I firmly believe this proposal should not be implemented. Your time and consideration of this communication is appreciated.
Very truly yours,
Ruth A. Bartlett, CPA
Partner, Frazier & Deeter, LLC
Member, AICPA Council
Past President – Ga. Society of CPAs
RAB:"
K:\rab022\SECletter.091500.doc
September 18, 2000
Dear :
I read with alarm the proposed Securities Exchange Commission (SEC) regulation "Revision of the Commission's Auditor Independence Requirements; Proposed Rule, 65 Fed. 43, 148 (2000)," (the proposal). My opinion is offered during the comment period for the proposal expiring September 25, 2000. I am an audit partner in a full service local CPA firm of 50 professionals in downtown Atlanta, GA. I firmly believe the proposal, as currently written, is unwarranted, not supported by facts, or requested by the financial and business. Non-audit services offered by audit firms simply have not compromised auditor independence or audit failure. The following matters support my position concerning the proposal.
- Audit firms have an excellent history, awareness, and attitude of maintaining, observing, and adhering to the Independence Rules. Audit firms are well aware of the Independence Rules in regard to non-audit services offered by audit firms.
- I cannot see a problem concerning audit firms violating the Independence Rules as they relate to non-audit services. What facts and circumstances were used to determine that the "Scope of Services" offered by audit firms has resulted in substandard engagements through financial and auditing standards violations? I believe the number of substandard engagements, if any, do not support the dramatic change relevant to the "Scope of Services" offered by audit firms.
- In the last 10 annual reports to Congress, the SEC has not mentioned any concerns regarding the "Scope of Services" offered by audit firms. Where has this concern originated?
- It appears to me that the SEC has ignored the conclusions of the SEC's Panel of Audit Effectiveness of the Public Oversight Board. This SEC-appointed panel concluded, "both the profession and the quality of audits are fundamentally sound." The Panel did not find any evidence that the provision of non-audit services hurt audit quality. The Panel did note that "in numerous instances non-audit services contributed to a more effective audit." As an audit partner, I support that view.
Page Two
September 18, 2000
- The proposal greatly restricts the ability of the public to benefit from the knowledge possessed by audit firms. The financial and business community will be forced to undertake highly inefficient and costly time and expense to procure needed non-audit services from those that simply do not have the knowledge and understanding possessed by an audit firm. This will hurt the business owners and cost them more in total professional fees.
- The proposal does clearly state the proposal "would not effect tax-related services" provided by audit firms to audit clients. The proposal references strictly compliance services provided by audit firms to audit clients. It would prohibit an audit firm from acting as an advocate for an audit client, providing expert service in administrative proceedings, and logically prohibiting audit firms from representing audit clients before the Internal Revenue Service.
- The proposal would create a negative effect on the ability of audit firms to recruit and retain the best talent. Professionals would not be interested in or challenged to work with firms in which 25% - 40% of the current market for firms would not open to them to practice. The CPA Vision Project touts the profession as attracting more well-rounded business professionals that can also perform consultative services to our clients.
- The impact to all audit firms, regardless of having SEC audit clients or not, will be dramatic.
Other regulators will use the proposal, if adopted, as a model. This "model" will be used as by state boards of accountancy, other federal regulators, i.e., banking and ERISA areas of audit practice, and other regulators. The proposal will have impact to the regulatory approach to auditor independence outside of the United States.
The significance of this impact requires the SEC to reconsider the timing of the proposal due to the following:
- The 75 day comment period is entirely too short to permit meaningful and timely public input. This short comment period does not permit collecting and analyzing the great deal of data required and to offer meaningful and viable alternatives for regulating the "Scope of Services" offered by audit firms.
- Three years ago the SEC set up the ISB. I believe the work of the ISB is being completely pre-empted. The ISB as originally charged by the SEC was to develop new concepts and framework regarding auditor independence and related implementation.
Page Three
September 18, 2000
- Recently, the ISB, NYSE, NASD, American Stock Exchange, and the SEC have adopted new disclosure and audit committee requirements. The proposal and its timetable have not given enough time for those requirements to mature and work.
In addition, I challenge the authority of the SEC in regard to this "Scope of Services" rule. The authority cited by the SEC, in the proposal pertain to the filing of public companies' financial statements that have been audited by independent audit firms. This authority does not provide for the making of rules that govern and regulate the audit profession itself. I also question any proposal, which permits an agency of government the ability to control the services offered by any business, or control the services procured by any business. This clearly is not in the best interest of the financial and business community, or the general public.
Lastly, the proposal is a fundamental change to one of the most fundamental and observed rules of the audit profession. The history of auditors providing independent and reliable financial information to the public, investors, and other interested readers is indeed long and well documented for over one century and does not require any change at this time.
I firmly believe this proposal should not be implemented. Your time and consideration of this communication is appreciated.
Very truly yours,
Ruth A. Bartlett, CPA
Partner, Frazier & Deeter, LLC
Member, AICPA Council
Past President – Ga. Society of CPAs
RAB:"
K:\rab022\SECletter.091500.doc