Date:    09/18/2000  11:44 PM

Subject: Urgent - SEC Proposal File No. S7-13-00

September 18, 2000
     
Re:     Securities and Exchange Commission
        17 CFR Parts 210 and 240 
        [Release Nos. 33-7870; 34-42994; 35-27193; IC-24549; IA-1884; File
No. S7-13-00] 
        RIN 3235-AH91 
        Revision of the Commission's Auditor Independence Requirements
     
Dear Sir:
     
There's an issue being driven by the Commission that
I believe will affect every CPA, and potentially every business in 
Michigan.  The issue is the SEC's proposed rule that would prohibit firms,
which audit SEC registrants from providing non-audit services to their audit 
clients.  This would negatively impact all CPAs and their clients, 
regardless of size.
     
If adopted by the SEC, this restrictive standard could easily affect every 
firm's ability to provide almost any non-audit service.  This could include 
accounting and bookkeeping services, payroll services, systems design and 
implementation, valuation, management, consulting, financial planning, 
expert witness and other services that are the growing areas of service for 
most local firms.
     
In addition to affecting firms, implementation of this rule could also 
adversely affect the relationship between auditors and their clients. What's 
most upsetting about this proposal is that it ignores the reality that 
stockholders and corporate executives are confident in their auditor's 
independence and are satisfied with the overall quality of financial 
reporting.  That's among the findings of a major national study of corporate 
executives conducted by the Independence Standards Board.  Most importantly, 
none of the research conducted has found evidence to support the conclusion 
that providing non-audit services has impaired independence or audit quality. 
 
     
Updating the independence rules is probably warranted, but the sweeping 
overhaul as
proposed goes far beyond anything that is necessary.  I am opposed to 
passage of this proposal.
     
Thank you for your time.
     
     
Timothy J. Cain, CPA
Farmington Hills, MI
     
Member of American Institute of CPA's 
Member of the Michigan Association of CPA's
Member of the Financial Executives Institute 
Member of the Institute of Management Accountants