Date:    09/25/2000  12:52 PM

Subject: S7-13-00

     
Ms. Katz:
     
The Securities and Exchange Commission (SEC) should analyze and evaluate its 
decision to move forward with the proposed rule governing audit independence and
prohibiting non-audit services on facts and evidence, otherwise it will 
undermine the value and objectivity of the "public interest" the SEC is 
advocating. 
How could this proposed SEC rule be considered, if there is no empirical 
evidence that non-audit services have compromised audit quality or auditor's 
independence?  The SEC's Chairman, Arthur Levitt, Jr., contention is based on 
perception rather on reality, "public confidence" if fueled by a New Economy 
rather perception on auditor's independence, our markets are based on facts, 
that is, strong economy, new technologies, low unemployment, and low inflation.
     
Investor's losses are not due to lack of auditor's independence or perceived 
conflict of interest between audit and non-audit services.  Their loss is 
attributable to an overvalued technology, sector that suddenly confronted 
reality.  We as auditors have the ongoing challenge and resposibility to value 
crucial assets, intellectual property, innovative process, and groundbreaking 
patents.  These underpin financial statements and New Economy for companies, as 
well investors, bringing wild market mood swings, as consequence, SEC is 
pretending to cure the market's volatility with this proposition , its wrong.
     
The fact that accountants sell their clients consulting services
do not impede independence, but the proposed rule does impede investors and 
companies obtained efficient and prompt solutions to other measures of value 
that they used on today economy.
     
To improve "public interest" CPA firms should disclose more about its consulting
engagements and fees , so investors can judge for themselves whether an auditor 
is independent, SEC proposition is not a solution on the New Economy and 
globalization, investors needs to procure companies true worth from independent 
accountants as well consulting services which provides real-time information 
instead of historical snapshots.
     
     
Independent CPA firms should be allowed to keep their freedom  to consult, under
stronger rules to protect investors.  Audit committees of corporate boards must 
review and disclose all relationship with their auditing firm, and prove to 
shareholders that consulting work doesn't compromise audit independence, this 
way SEC will improve the CPS's audit without closing the opportunities to serve 
other needs of investors in today New Economy.
     
Therefore, I respectfully request that the SEC does not consider
this proposed rule, and procure a solution to their concerns on valid and 
objective alternatives, as the consign in this letter.
     
     
Joseph A. Fuentes, CPA
Managing Partner  
Fuentes-Fernandez & Company
Capital Center Suite 704  
San Juan, Puerto Rico  00918