From: Diane Allen
Sent: February 26, 2007
Subject: File No. S7-24-06

Request by SEC for comments on proposed Ė Managementís report on internal controls over financial reporting

I appreciate the opportunity to provide input on the proposal from the SEC. I am the SOX Compliance Manager at 3M Company, a Fortune 500 company with revenue in excess of $22 billion.

In general, I support the idea of the interpretive guidance for management regarding its evaluation of internal controls over financial reporting.

My experience is that good communication and relationships between the auditor and registrant are critical to ensure maximum benefit at the lowest cost. I believe this will continue to be the situation with the new guidance as well, specifically in the determination of risk assessment. The guidance provides several factors for consideration of risk. Risk will be assessed by management and by the auditor. Management may choose to do some work in areas it does not consider high risk just in case the auditor considers it to be high risk, to allow the auditor the option to use some of that work performed by management. Good alignment in risk consideration factors is important to an effective SOX program.

Regarding the management guidance, I offer the following for consideration:

  • Clarify quantification expectations for determining materiality to ensure alignment between management and auditor evaluation. If registrants should use the same percent of net income used by the auditors as the quantifiable reference point it should be stated as such.
  • Clarify expectations and provide examples of acceptable documentation of risk assessment, such as, what is acceptable documentation for managementís assessment of risk from a qualitative and quantitative perspective? Is additional documentation expected if the risk assessment by management differs from the auditor assessment?

I appreciate the opportunity to provide input and look forward to realizing the benefits afforded by the change in management guidance.

Diane Allen
3M Company