Subject: File No. S7-24-06
From: Natalie M Lepkowski
Affiliation: Student at University of Wisconsin - La Crosse

February 25, 2007

February 18th, 2007
Nancy M. Morris
Secretary, SEC
100 F Street, NE
Washington, DC 20549-1090
RE: File Number S7-24-06

Dear Ms. Morris,

Comment Letter Regarding Proposed Rule:
Management's Report on Internal Control over Financial Reporting

In response to question in request for comment; are there particular areas within the proposed interpretive guidance where further clarification is needed?

It seems wise to agree that the methods of conducting evaluations of the ICFR will vary from company to company and will depend on the circumstances of the of the company. It is also conclusive that not one single method for conducting such evaluations meets the need of every company. However, if this proposed guidance is intended to allow management appropriate flexibility to design an evaluation process, then shouldnt the adequacy to address the risk of a material misstatement in its financial statements must then also be flexible?

Also, since it is not required for management to identify every control in a process or document the business processes impacting ICFR, then it is up to management to determine which controls to be identified according to those that address a higher risk of a material misstatement in the financial statements. But as previously stated, if management is allowed appropriate flexibility to design an evaluation process, are they then are they also allowed appropriate flexibility when assessing those controls in financial reporting? If every company is allowed flexibility according to size and circumstances, what is appropriate flexibility when the end result is suppose to be material accuracy?

The objectives of the proposed amendment is stated that, the proposed rule amendments are intended to make implementation of the internal control reporting requirements more efficient and cost-effective by reducing ambiguities that have arisen due to the lack of certainty available to companies on how to conduct annual evaluation of ICFR My concern is that if it is up to management to conduct top-down risk-based approach when developing their evaluation structure that allows appropriate flexibility, then will this really reduce ambiguities and become more cost-effective? If management is conducting its own approach to evaluation of ICFR, doesnt that leave more room for uncertainty and possibly the need to evaluate and amend their own evaluation processes at the end of each fiscal year depending on the outcome in their reporting of effectiveness and efficiency? Is it possible that it may take several attempts by management until it conducts an evaluation structure that really meets the needs of its company, and if so, could this lead to more cost and time expansion of the company?

So much is emphasized on the end of the fiscal year. If another objective of the evaluation of the ICFR is to provide management with a reasonable basis for its annual assessment as to whether any material weaknesses in ICFR exist as of the end of the fiscal year, then how will the evaluation of ICFR be cost-effective if there is no detection of a weakness until the end of the fiscal year. I think that if it is an objective to make evaluation of ICFR more cost-effective, then a structure needs to be designed in a way that reporting to management is ongoing and that risk factors may be changed or altered on an ongoing basis to truly analyze the efficiency and effectiveness of the evaluations of ICFR. I understand that this will be a concern to the company when conducting its design for an evaluation process.

It seems that further clarification is always needed when referring to financial reporting and proposed rule ammendments.. I can see that the proposed rule amendments are being made to address the concerns made over the last two years regarding Section 404 of Sarbanes-Oxley. I also agree that companies need to design a structure for completing the evaluation of ICFR. However, I think that more guidance be necessary in designing a structure for a company.

Thank you for your time,

Natalie Lepkowski
University of Wisconsin- La Crosse