Date:    09/14/2000  2:06 PM

Subject: 

     
September 14, 2000
     
     
Jonathan G. Katz
Secretary
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549-0609
     
Reference File No.: S7-13-00
     
     
     
Mr. Katz,
     
I am writing to comment on your proposed rule amendments regarding auditor 
independence.  While I agree with the Commission that this ever-changing 
economy requires continual review of independence rules, I strongly 
disagree with the portions of the Commission's proposed rules that severely 
restrict non-audit services that could be provided to a public audit 
client.
     
It appears to me that this proposed regulation is unnecessary.  The 
decision to move forward with this rule prohibiting non-audit services has 
been made without evidence of non-audit services compromising any audit 
quality or auditor independence or causing audit failure, in any 
significant way.
     
In fact, the proposal ignores the fact that the Panel on Audit 
Effectiveness of the Public Oversight Board concluded that "both the 
profession and the quality of audits are fundamentally sound."  The Panel 
could find no evidence that a firm providing non-audit services damaged 
audit quality in any way.  In fact, the Panel concluded that often 
non-audit services actually contributed to a more effective audit.  It's 
especially interesting to note that the Panel was formed at the request of 
the SEC.
     
No SEC studies suggest that the scope of services impaired audit 
effectiveness nor did they conclude that a ban on non-audit services was 
appropriate.  It seems as though the SEC's proposed rule is a solution that 
is in search of a problem.
     
I am concerned that this proposed regulation could have potentially 
devastating effects on my business while limiting the professional services 
choices for our clients.   It has the potential to:
·    set a precedent for other regulators, including state boards of 
accountancy, federal regulators, banking regulators, and others, to adopt 
similar rules, which would further damage accounting firms' livelihoods; 
·    preclude accounting firms from entering into joint ventures or 
partnerships, since the firm's independence could be impaired as a result 
of the alliance with other parties;
·    restrict public companies freedom of choice when seeking outside 
professional services;
·    bring about a negative effect on recruiting and retention qualified 
employees, as the best professionals will not want to be at a firm where 
much of the market is "off limits."
     
Also, I understand the Commission's need to gather feedback from the 
largest accounting firms, but I trust you will consider the significant 
effect of the proposed rule-making on accounting firms outside the five 
largest, as well as the effect on smaller public companies and non-public 
companies.
     
I would be happy to talk with you further about my concerns regarding this 
proposal. If you'd like more information, please contact me at my email 
address:
     
dnisley@crowechizek.com
     
     
Sincerely,
     
     
Doug Nisley