Date:    09/17/2000  1:36 PM

Subject: S7-13-00

Chairman Levitt and Commissioners:
     
I am writing to protest new rules that will prohibit CPA firms from providing 
non audit services to audit clients.  Our accounting firm serves a number of the
smallest SEC registrants.  These firms need support and assistance to comply 
with the myriad regulations and requirements imposed upon them by government and
industry.  The proposed rules will severely restrict or eliminate our clients 
access to services that will not only benefit our client, but will also benefit 
the SEC and the investing public.
     
Small registrant do not have the necessary staff resouces to meet all their 
reporting requirements and information system needs.  They rely on their CPA 
firms for objective and informed assistance.  It is both inefficient and 
ineffective to try to look to many separate service providers to meet these 
needs.
     
In fact, our clients and their constituencies almost always benefit from the 
improved knowledge of the CPA firm that provides multiple services.  The SEC has
proposed new rules with no empirical evidence to support its assumption the 
prohibited services compromise independence.  My own anecdotal experience would 
suggest the opposite is true.
     
The SEC ignored the conclusion of the current Panel on Audit Effectiveness of 
the Public Oversight Board, a panel that was formed at the request of the SEC. 
The panel concluded that, "both the profession and the quality of audits are 
fundamentally sound."  The panel said it could find no evidence that the 
provision of non-audit services has hurt audit quality.  On the contrary, it 
concluded that in numerous instances non-audit services contributed to a more 
effective audit. 
     
The SEC would force public companies to constantly choose whether to hire a firm
solely as its auditor or solely as a provider of other services.  In fact, under
the proposed new rules, a public company might be compelled to dismiss an audit 
firm that has done consistently outstanding work in order to obtain services 
from the auditor's non-audit colleagues.
     
The SEC's proposal to restrict the services offered by accounting firms 
represents a fundamental restructuring of a profession that has successfully 
given investors the reliable, independent data they need for the past century. 
A decision by a government agency to tell some business organizations what 
services they may offer and to tell other businesses from whom they can buy 
services is an extraordinary economic intervention in the absence of any 
empirical evidence or other clear need.  I think most Americans would find this 
a curious public policy position for their government to take.
     
This quest for a solution where a problem has not been idenfied will surely have
the unintended result of reducing the quality of audits, limiting access to 
auditing and other needed services which will hurt the investing public the SEC 
is supposed to protect.
     
Thank you for your attention,
     
Michael Hartwig
     
Copy by Mail:  Chairman Arthur Levitt
                       Commissioner Paul R.Casey
                       Commissioner Isaac C. Hunt, Jr.
                       Commissioner Laura S. Unger