Date:    09/18/2000  11:11 AM

Subject: Reference file no. S7-13-00

Ladies and Gentlemen:
     
     
I am writing this e-mail in response to the proposed rule that auditors of 
publicly held companies should no longer provide various other services.
     
Although I do not audit any publicly held companies, I believe I must respond to
the ramifications this ruling might one day have on small CPA firms. I am 
somewhat disturbed that SEC believes this necessary to improve the independence 
and quality reports of publicly held companies. If there are independence and 
quality issues in reporting of any company, the SEC should investigate those 
auditors and report them to their State Boards of professional regulation and to
the American Institute of Certified Public Accountants. I find this proposed 
ruling an attempt to fix a complicated problem with an easy answer. 
     
I don't believe the SEC will improve the quality of the reports it receives by 
forcing some auditors to provide only audit services to those clients. Here is 
why. First of all, if some auditors are not providing high quality, independent 
reports to the SEC regarding publicly held companies, forcing those auditors to 
only provide audit services worsens the situation. The audit service has over 
the years become a more competitive and nonprofitable part of most CPA firms. In
order to make the audit more efficient and effective CPAs have learned to 
provide other services such as payroll processing, agreed upon procedures, 
bookkeeping functions, human resource consulting, and Management Information 
Systems consulting. In my firm, all of our services, including those mentioned, 
are performed with independence and objectivity. By providing those services to 
audit clients we learn more about their business and details of operations, thus
enhancing the audit process. Further, by providing these services to audit 
clients we can focus on areas that add value to management and operations. If 
quality and independence is an ongoing issue that the SEC has with an auditor, 
the SEC should deal with the CPA firm individually. Punishing the whole 
profession will not solve the problem.  I believe that if this ruling is 
approved, audits of publicly held companies will become more costly and thus 
force already poor auditors into cutting more corners to make a profit. Managers
in large CPA firms are under a great deal of pressure to make profit. This 
ruling would only worsen an already difficult situation. 
     
If this ruling would ever become applicable to all audits I am afraid the 
results would be catastrophic to small CPA firms. If other regulators or state 
boards of accountancy modeled after the SEC, the impact to small firms and their
clients would be horrific. Not only would small firms lose profitable clients, 
the clients themselves would lose a longtime, knowledgeable, trusted 
professional. 
     
Please reconsider the effects of this proposed ruling.
     
David W. White, CPA, Manager
Thomas W. Hill & Associates
Decatur, IL