9100 Babcock Boulevard Pittsburgh, PA 15237
Phone: (412) 367-6640 Fax: (412) 367-6994

September 5, 2000

Mr. Jonathan G. Katz, Secretary
Securities & Exchange Commission
450 Fifth Street, NW
Washington, DC 20459

Summary of Intended Testimony in Connection with Request to Testify
Comment File No. S7-13-00

Dear Mr. Katz:

I am a recently retired audit partner from one of the "big 5" CP A firms having had 35+ years of experience in auditing and accounting.

As noted in my original request to testify (received by you on August 24, 2000), I believe from reading available material and transcripts of testimony from the July 26, 2000 hearing before the commission, that there are a couple of areas not addressed which should be considered before action by the commission-and-at least one area which will have an unintended and negative impact on individuals coming from auditing firms that needs to be considered by the commission.

Enclosed are three copies of a summary of my intended testimony with respect to the matter under consideration.

As noted in my previous letter, I request to testify at the September 20, 2000 meeting in Washington, DC, (preferably in the AM, but can do later in the day). My comments will take less than 10 minutes.

Please respond to the above address.

Very truly yours,

Joseph F. Long

Securities and Exchange Commission
Outline of proposed comments at public hearings regarding auditor independence rule
Joseph F. Long

Some considerations when addressing auditor independence and audit firm consulting businesses from someone fresh from the audit trenches.

  1. Much said about big consulting fees impairing auditor independence-but-what about the real world impact of big audit fees impairing auditor independence.

    The real (and subtle) impact of requiring audit personnel to sell consulting services to audit clients:

  2. A possible unintended impact of SEC proposal on people leaving public accounting

    Audit firm position that ownership of related consulting firm stock by a retired partner who is on the board of directors of an audit client would cause independence to be impaired.

    Consulting firm stock received by retired partner in part to settle pension liabilities (partner had no choice of other investments)-partner otherwise "cashed out" of former firm-partner only permitted to sell stock over five year period or would sell all immediately.