99.(12)(B)

                           Jungerman, Gilboa, Silber
                      Certified Public Accountants (Isr.)

April 19, 1999

Auditors' Report to the Shareholders of Liraz Systems Ltd.

We have audited the accompanying balance sheets of Liraz Systems Ltd. (the
Company) as at December 31, 1998 and 1997 and the consolidated balance sheets of
the Company and its subsidiaries as at such dates, and the related statements of
income, shareholders' equity, and cash flows, for each of the three years, the
last of which ended December 31, 1998. These financial statements are the
responsibility of the Company's Board of Directors and of its Management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We did not audit the financial statements of certain subsidiaries, whose assets
constitute 79.4% and 48.1% of the total consolidated assets as at December 31,
1998 and 1997 respectively, and whose revenues constitute 34%, 41.5%
and 53.6% of the total consolidated revenues for the years ended December 31,
1998, 1997 and 1996, respectively. The financial statements of those
subsidiaries were audited by other auditors whose reports thereon were furnished
to us. Our opinion, insofar as it relates to amounts emanating from the
financial statements of such subsidiaries, is based soley on the said reports of
the other auditors.

We conducted our audits in accordance with generally accepted auditing
standards, including standards prescribed by the Auditors Regulations (Manner of
Auditor's Performance) 1973. Such standards require that we plan and perform the
audit to obtain reasonable assurance that the financial statements are free of
material misstatement, whether due to error or intentional misrepresentation. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by the Board of
Directors and by Management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

The above mentioned financial statements were prepared on the basis of the
historical cost convention, in historical values adjusted for the changes in the
general purchasing power of the Israeli currency, in accordance with opinions of
the Institute of Certified Public Accountants in Israel. Condensed data of the
Company in nominal historical values, on the basis of which its adjusted
financial statements were prepared, is presented in Note 35.

In our opinion, based on our audits and on the reports of the abovementioned
other auditors, the financial statements referred to above present fairly, in
all material respects, the financial position of the Company and the
consolidated financial position of the Company and its subsidiaries as at
December 31, 1998 and 1997 and the results of their operations, the changes in
the shareholders' equity and their cash flows for each of the three years, the
last of which ended December 31, 1998, in conformity with generally accepted
accounting principles. Furthermore, these statements have, in our opinion, been
prepared in accordance with the Securities Regulations (Preparation of Annual
Financial Statements) 1993.

<PAGE>

In the course of our audit of the financial statements for the year ended
December 31, 1998, nothing came to our attention which would indicate the
necessity for making any material modifications to the statement of
shareholders' equity, in nominal historical values, in order for it to be in
conformity with acounting principles generally accepted in Israel and in
the U.S.

The detail of the changes required to be made on the statement of shareholders'
equity, in nominal historical values, for the year ended December 31, 1997 and
1996, in order for them to be in conformity with accounting principles generally
accepted in Israel and in the U.S., appear in Note 32 to the final statements of
December 31, 1997,

Jungerman, Gilboa, Silber
Certified Public Accountants (Isr.)