Date:    08/29/2000  2:58 PM

Subject: S7-13-00

Dear Mr. Katz,
     
As a partner in a local, mid-size CPA firm and practicing accountant for over 25
years, I am concerned about the ramifications of the SEC's most recent proposal 
regarding independence.  I am writing to urge the SEC to rethink its proposal.
     
Admittedly our firm has chosen not to involve itself in SEC audits so, for us, 
the proposed rules could mean additional business when registered companies can 
no longer rely on their auditing firm for consultation services and must seek 
those services elsewhere.  Also, I agree their is a need for strengthening the 
Independence Standards where the public interest is concerned.
     
I worry, though, that this proposal will reach far beyond the "public" domain. 
Other regulators, (i.e. state accountancy boards, bank regulators, federal 
agencies, etc.) will argue this rule is precedent for setting rules at their 
levels.  Eventually the SEC rule will filter down to effect our smallest, 
closely-held clients.  
     
Relationships with clients and other businesses are the key to successfully 
practicing in our profession.  To impose rules which inhibit (or forbid) the 
interdependence necessary for strong relationships will have an adverse effect 
on the profession in the long run.  Especially when there is no evidence that 
non-audit services impair audit effectiveness. 
     
Fees for audits will be driven higher as "audit-only"  firms find it harder and 
harder to recruit and retain talented professionals who will believe that 
opportunity will be limited with this type of firm.  This will impair audit 
effectiveness which is exactly the opposite result sought by the SEC.
     
I respectfully ask that the SEC carefully consider the scope of this proposed 
rule and the effect it will have on businesses of all sizes and the accounting 
profession in general.
     
Very truly yours,
     
Nancy F. Tomanelli, CPA
Diamant, Katz, Kahn & Company LLP
365 West Passaic Street
Rochelle Park, New Jersey 07662