Date:    09/22/2000  8:34 AM

Subject: Auditor independence proposals 
Sept 21, 2000
     
Securities & Exchange Commission
Washington, DC
     
Dear Sirs/Madams:
     
I am writing to express my deep concern over the proposed new rules regarding 
independence of auditors auditing SEC clients.
     
I believe the proposed new rules are excessively restrictive.  There is no need 
for drastic new restrictions on services that a CPA may offer audit clients. The
rules as proposed are too broad, and have the potential to cause a ripple effect
as other governmental levels, departments, and state boards of accountancy 
implement rules to "harmonize" with SEC.  This could have disastrous effects on 
smaller firms nationwide, whether or not they have SEC reporting requirements. 
In addition to the negative effect on CPA firms nationwide, the businesses they 
serve would also be impacted; they would be forced to find new sources for 
either their consulting or their audit services.  In some smaller markets, this 
may range anywhere on the scale from simply inconvenient to inefficient or even 
impossible.
     
I (and my profession in general) recognize the importance of independence and 
objectivity in all audits, not just those of SEC clients.  AICPA and state 
societies of CPA's all have codes of ethics that include rules designed to 
maintain the CPA's independence; these rules are taken seriously by the vast 
majority of CPA's, and the public's perception of the CPA's independence is 
favorable.  There are also many other safeguards, ranging from corporate audit 
committees to partner reviews, and on up to legal liability resulting from 
faulty audits.
     
The Independence Standards Board, which includes public participation, has 
already been working on some needed updates to rules relating to financial 
interests and family relationships.  AICPA supports these efforts.  The 
independent Panel on Audit Effectiveness, which was formed by the Public 
Oversight Board at the request of the SEC concluded that it found no instances 
where providing non-audit services to an audit client had a detrimental effect 
on audit quality.  On the contrary, in one fourth of the audit engagements 
reviewed, other consulting services were found to actually improve audit 
quality.
     
The accounting and auditing industry has long recognized its fiduciary duty to 
the public, and has successfully regulated itself for decades, resulting in 
timely, accurate, unbiased information dissemination to the investing public. 
There is clearly no need for SEC to intervene between the normal relation of 
auditors and their clients with these excessively restrictive independence 
rules.  I urge SEC to reconsider its position and drop these proposals.
     
Yours truly,
     
     
David L. Wagner, CPA
1326 Oxford Rd. Berkley, MI 48072