Date:    08/15/2000  10:21 PM

Subject: S7-13-00

Congratulations on finally coming to recognize that providing non-audit 
services to companies is in fact a compromise of the auditor's independence.
     
As a practicing CPA, I am constantly faced with the dilemma of how to balance 
the sometime lucrative consulting fees that I receive for providing 
consulting services to my firm's audit clients with the equally lucrative 
audit fee paid to me to issue an independent report on the same client's 
financial position and results of operations and cash flows.
     
As a recent case in point, a client asked my firm to prepare a transfer 
pricing study, which we prepared and delivered to the client.  In our 
transmittal letter to the client, we took the position that this strategy 
would require a disclosure in our annual audit report.
     
Guess what?  We lost the audit and ultimately, we lost all of our consulting 
work for this client.
     
As a former Ernst & Young, as well as an Arthur Andersen, audit staff member, 
I applaud the awakening of the Commission's awareness of an obvious conflict 
of interest.
Please feel free to call on me for testimony in support of your position.
     
Very truly yours,
Gerald Bauman, CPA