Date:    08/25/2000  12:08 PM

Subject: Comments RE: file No:   S7-13-00

Jonathan G. Katz, Secretary
Securities and Exchange Commission
     
I believe the proposed revisions to Rule 2-01 of Regulation S-X  revising 
auditor independence is short sighted and takes the regulatory oversight mission
of the SEC a large step to far in proposing to prohibit non-audit services in 
determining the independence of an auditor or auditing firm.
     
The SEC's own staff admits that there is not any empirical evidence that audit 
quality or auditor independence have been compromised by an audit firm providing
non-audit services and can not point to any studies that indicate otherwise.
     
The Panel on Audit Effectiveness of the Public Oversight Board, formed at the 
request of the SEC concluded that the quality of audits are fundamentally sound.
     
As a CPA and financial executive working in industry your proposed rule would 
restrict the competitive choices I have in seeking professional services from 
accounting firms.
     
The proposed scope of service rule change, if it becomes effective, would put 
the SEC in the position of imposing restrictions and regulations on the 
accounting profession, something the SEC does not have the statutory authority 
to do.
     
I urge you to remove your proposed scope of services rule from the modernization
of SEC regulations you are currently undertaking.
     
Douglas L. Rex,  CPA