Date:    08/21/2000  11:56 AM

     
Dear Sir/Madam:
     
I am writing to you regarding proposed SEC regulation reference file 
number S7-13-00.  My comments and concerns are to follow:
     
Upon review of this regulation, it is my opinion that this proposal is 
unwarranted and intrusive to my profession.  The proposed regulation 
would adversely affect both accounting firms and the CPA working in 
industry.  I believe that this regulation unfairly limits the markets 
available to the CPA by restricting the services that may be offered to 
an audit client.
     
The SEC proposal prohibits non-audit services to the audit client.  The 
SEC  based its decision to move forward with this ruling  without facts 
or evidence.  The SEC admits that there is no empirical evidence that 
non-audit services have compromised audit quality or auditor 
independence, nor ever caused an audit failure.  Quite the contrary, it 
appears this proposed regulation completely ignores the conclusions of 
the SEC's own study by the Panel on Audit Effectiveness of the Public 
Oversight Board performed at the SEC's request.  This study concluded 
that, "both the profession and the quality of audits are fundamentally 
sound".  The study also stated it could find NO evidence that the 
provision of non-audit services has hurt audit quality and in fact that 
in numerous cases, these additional services contributed to a more 
effective audit.
     
This regulation has far-reaching and dramatic implications.  It would 
not only limit the non-audit services a CPA could provide to their 
client , it would also effect the public companies freedom of choice 
when seeking outside professional services.  The public company would be 
forced to constantly choose whether to hire a firm solely as its auditor 
or as a provider of other services.  In addition, this proposal would 
have a negative effect on an accounting firms ability to recruit and 
retain the best talent.  The best audit professionals will not want to 
be at a firm where 25% to 40% of the market is "off-limits".  One final 
implication of this proposal is that of the perverse effect caused when 
the auditor is overly or exclusively dependent on its client for the 
fees.  By making audit firms dependent on auditing fees, this proposal 
is certainly  contrary to the public interest.
     
The regulation prohibits non-audit services.  It is my opinion that this 
scope of services rule must not be allowed to go forward.
     
Sincerely,
     
Carrie A. Roache Nipe, CPA
Madison, South Dakota