Date:    09/15/2000  9:03 PM

Subject: Auditors

Gentlemen:
     
This is to discuss the S7-13-00 that deals with CPA's providing non-audit 
services. My view is that the importance of the CPA regarding the financial 
markets has diminished significantly in recent years. The valuations of 
companies such as Cisco Systems, Oracle, Microsoft, Sun Microsystems, Amazon, 
Ebay and others has very little to do with the audited reports. The entire 
valuation basis is premised on future projections, all of which are not audited.
So I would have to say that the major role in the market is played by the stock 
market analysts who do not seem to be the subject of any real regulation. 
     
So if this type of regulation wasn't pressing 10 years ago, it shouldn't be 
pressing now. The existence of liability lawsuits is a significant deterrent to 
fraud being committed by auditors.
     
Furthermore, it seems that many of the accounting firms are breaking up because 
the partners on the consulting side do not want to share their growing 
businesses with the stagnant audit and tax businesses. This is already the case 
with Arthur Andersen. The market is already starting to take care of this 
problem. 
     
     
David Engel