Date:    08/21/2000  1:52 PM

Subject: Reference File No.: S7-13-00 

Comments on the SEC's Proposed Rule Governing Auditor Independence:
     
Independence has been the focus burden of the Auditor from the beginning. 
 This is why we see such detailed descriptions of the instances of 
independence and their breech, or mitigation.  The SEC, in taking such a 
gross simplistic view of the relationship, does not take into account the 
vendor-to-customer relationship as a controlling factor in the provision of 
services.  Rather they seem to be treating the CPA firm and their client as 
business partners.  Given that this is the view of the relationship that 
CPA's want to foster, this is not surprising.
     
In relation to the "Financial information systems design and 
implementation."  restriction, it is a fact, in my experience, that this 
service is very independent of the audit in the mind of the client.  What 
they are looking for in a consultant is someone who knows what is required 
of the system.  They are interested in obtaining a system that meets their 
business needs and if there are shortcomings with the system the 
"partnership" ends and the vendor-to-customer relationship quickly takes 
precedence.  This then overrides the "mutual interest" and places the 
burden on the CPA to make the system work as contracted, in order to be 
compensated for the work performed.
     
The desire of the CPA in performing these services is to assist the client 
in obtaining a system that will have the proper controls and will provide 
the environment to perform the necessary procedures required in the audit. 
 In addition, it is not in the CPA's best interest to perform an inadequate 
audit and risk the professional liability.
     
The SEC's view is that a mutual interest exists in the success of the 
system.  While this should be the case, the mutual interest disappears and 
the customer/vendor relationship takes over long before an audit is 
conducted.
     
Richard Marksberry, CPA