Date:    09/19/2000  3:32 PM

Subject: S7-13-00
 
Dear Commissioners,
     
This SEC proposed rule appears to severely restrict the scope of 
services that can be provided to clients by auditing firms.  I wish to 
explain why I oppose the SEC's scope of services proposal.
     
Auditors are usually smart people, well-educated in many facets of 
business.  Naturally, as clients have contact with their auditors, and 
discuss business issues pertinent to the audit, they may develop a sense 
of respect for the auditor's abilities.  Thus the client may wish to 
engage the auditor to consult on matters for which, as a result of the 
audit procedures, the auditor has developed a high level of 
understanding.  Further, as the auditor consults with the client on a 
wide range of business matters, the auditor comes to a greater 
understanding of the client's business, which enhances the auditor's 
ability to perform the audit.
     
Recently the Public Oversight Board, at the request of the SEC, 
appointed a Panel on Audit Effectiveness.  This panel considered whether 
it would be appropriate to forbid auditing firms from providing 
non-audit services to their clients.  The report of the panel states 
that there has never been a case in which the provision of non-audit 
services has contributed to an audit failure.  Rather, there is 
empirical evidence that the provision of non-audit services actually 
contributes to an effective audit by contributing to the auditor's more 
thorough understanding of the business.  The SEC's proposal appears to 
ignore the facts in the report that they commissioned.
     
The Audit Effectiveness Panel also recommended that the SEC encourage 
and support the ISB to carry out its independence mission and support 
the IIC and work with the ISB to clarify the IIC's role.
     
Though my practice is small, I am concerned not only as a CPA but as a 
taxpaying citizen and as an investor/user of financial statements.  The 
SEC should not create rules and regulations without a clearly 
demonstrated public benefit.  In severely restricting public companies 
from hiring the same firm to perform audit and consulting services, the 
SEC may actually be harming the companies and their investors.
     
Adele Brady Bolson, CPA
914 - 140th Ave. N.E., #200
Bellevue, WA  98005-3482