August 13, 1998

Jonathan G. Katz


Securities and Exchange Commission

450 5th Street N.W.

Washington, DC 20549-6009

RE: SEC Proposed Amendment to Rule 102(e) - Negligence Standard

File No. S7-16-98

Dear Mr. Katz:

We have reviewed the proposed amendment to Rule 102(e) and the AICPA's response to the proposed rules. We are also firmly committed to the integrity of financial reporting processes and protecting the investing public. We believe the standard proposed by the AICPA accomplishes these objectives and the SEC standards would create greater disciplinary authority not contemplated by Congress. Furthermore, the SEC appears to be unjustifiably singling out the accounting profession with standards not imposed on other professionals.

Accountants are often required to make judgments about facts and circumstances, which at the time, appear to be appropriate. In hindsight, these decisions can be questioned and different conclusions reached. This proposed standard would provide the SEC with unilateral authority to impose sanctions on accountants for good faith differences in opinion about professional standards or for an isolated error in judgment regarding their application.

The AICPA has offered several other reasons in opposition to the new proposed rule which we will not reiterate in this letter. However, we fully agree with those reasons.

We appreciate the opportunity to comment and your thorough analysis of the matter.


Hein + Associates llp