August 16, 2000
     
     
     
Jonathan G Katz, Secretary
Securities and Exchange Commission
450 Fifth Street, N W
Washington, DC  20549-0609
     
     
        Reference File No.  S7-13-00
     
Dear Secretary Katz,
     
I am Certified Public Accountant practicing as a sole proprietor.  Although 
I do not audit any SEC clients, I am concerned about the proposed ruling by 
the SEC for the future of my clients, my firm, and the accounting 
profession.  Matters adopted by the SEC have a probability of becoming the 
policy of other regulatory bodies that would have a direct impact on my 
situation.
     
My audit clients look to me to provide numerous other services to them. 
They want to deal with their auditor; they want to ask help from a person 
familiar with their business; they need assistance in bookkeeping and tax 
matters; they want the preparer of their returns to be able to represent 
them before the IRS; they want more from their CPA than just providing an 
audit report.  The clients I deal with are small compared to SEC entities, 
and it would be an unnecessary hardship on them to employ two accounting 
firms to get the services they require.
     
The SEC admits there is no evidence that non-audit services have 
compromised audit quality or auditor independence, nor have they caused an 
audit failure.  You are trying to provide a solution where there is no 
problem.
     
The current Panel on Audit Effectiveness of the Public Oversight Board, 
formed at the request of the SEC, concluded that, "both the profession and 
the quality of audits are fundamentally sound."  It also concluded that 
providing non-audit services contributed to a more effective audit.
     
     
The SEC states its proposed rule would not affect tax related services, but 
it would effectively ban the auditing CPA from administrative proceedings 
with the potential of prohibiting CPAs from representing audit clients 
before the IRS.
     
The proposals have a very loose definition of an "affiliate of the 
accounting firm."  Extending your definition, I would be precluded from 
auditing the owner of the building where I lease office space.  I would not 
be able to assist in any commercially valuable business relationships.  The 
current AICPA rules of independence cover this area adequately without your 
attempt to redefine them.
     
The SEC has rushed forward to regulate to avoid Congressional oversight and 
public participation.  You are attempting to impose radical changes to the 
accounting profession in the last months of the current administration, and 
before the matter can be presented to the next administration.
     
The SEC has many rules and policies regarding the work of independent 
accountants auditing public companies' filing of financial statements, but 
the SEC is trying to extend its reach beyond its boundaries to regulating 
the entire accounting profession.  You are going beyond your statutory 
authority to impose restrictions of possible perceptions about 
independence.
     
Although I do not audit SEC clients, I do audit organizations that are 
regulated by other government standards.  I fear that these other federal 
regulators could adopt these regulations.  This ripple effect would an 
example of over regulation initiated by the SEC that would cause 
unnecessary hardships and confusion.
     
I would request that the SEC table its proposed rule change.  If something 
is broken, then you should address it in due course and with the proper 
consideration given to the total picture.  A local expression is "If it 
ain't broke, don't fix it."  This expression has great applicability to 
this situation.
     
        Sincerely,
     
     
     
        John Cullum, CPA