Date:    09/18/2000  5:29 PM

Subject: File No. S7-13-00

Mr. Jonathan G. Katz
Secretary 
Securities and Exchange Commission
Washington, DC
     
Dear Mr. Katz:
     
    I have read the Proposed Rule for Revision of the Commission's Auditor
Independence Requirements and wish to make brief comments.
     
    By way of background, I am a former Big Eight [now 5] audit partner and have
spent the past 42 years in various financial and accounting positions, including
a substantial amount of time as an "auditor", plus time as a consultant and as 
an administrator in CPA firms, plus a fair amount of time as a controller/CEO. 
In the latter capacity I was a "buyer" of CPA firm services.
     
    My comments are made primarily from the foregoing background, but in
addition I am now more of an "investor", so my comments are also weighted from 
that side of the fence as well.
     
    I only recently received the Proposed Rule, so have not had sufficient time
to develop responses to many items, particularly with respect to the 
relationship issues involved in levels and degrees of ownership to apply to the 
independence questions.
     
    I do wish, however, to go on record as being generally in favorable of the
proposed changes. In particular, I support the notion of severely limiting the 
consulting services offered by auditing firms for audit clients. I believe that 
starting with a "total" ban on such services makes a great deal of sense, then 
perhaps backing off just a bit to permit some consulting services that would 
clearly not be viewed as putting the auditor in a position of judging the 
results of systems or procedures developed in a consulting capacity.
     
    While there may be no clearly provable cases of audit "failures" resulting
from possibly impaired judgements in situations where the audit firm rendered 
consulting services, it seems that proving such may be difficult. In other 
words, the difficulty in finding the "smoking gun". I am, as a CPA and as an 
investor, very much concerned about the appearance of lack of independence in 
these situations.
     
    I share the concern that auditors may accept audit engagements at marginal
profits in order to generate consulting services, and the possible effect on the
depth and independence of the audit in these instances.
     
    One of the "dangers" pointed out in the Proposed Rule is that with such a
substantial portion of many audit firm's revenues being generated by consulting 
services, there is a strong possibility that the time and attention, and 
resources, including the involvement of the top management of the firm, in the 
audit process may be lost. I wholeheartedly concur. 
     
    I wish I had the time to comment further and in more detail, but
unfortunately am not at this time in a position to do so.  As mentioned 
previously, I am in basic support of virtually all of the SEC initiatives set 
forth in the Proposed Rule, and am greatly concerned about the public's 
perception of the audit process if something significant is not done to address 
the issues at hand.
     
Respectfully submitted,
     
Charles E. Hoke, CPA
     
24 Ryewood Circle
Homosassa, Florida 34446