Medtronic, Inc.

January 13, 2003

Jonathan G. Katz, Secretary
U.S. Securities and Exchange Commission
450 Fifth Street N.W.
Washington D.C. 20549-0609

Re: Strengthening the Commission's Requirements Regarding Auditor Independence - File No. S7-49-02

Dear Mr. Katz:

Medtronic, Inc. (Medtronic) is pleased to submit this letter in response to the Commission's request for comments on its proposed rules to strengthen the Commission's requirements regarding auditor independence, as contained in Release No. 33-8154; 34-46934; and 35-27610.

Medtronic is a world-leading medical technology company, providing lifelong solutions for people with chronic disease. We were founded in 1949 and today serve physicians, clinicians and patients in more than 120 countries. Our current net sales and earnings are annualizing at over $7 billion and $1 billion, respectively. Our market capitalization is approximately $56 billion.

Comments on Partner Rotation and Forensic Audits

We agree with the Commission's fundamental position (and the fundamental position of Congress and the President, as reflected in section 203(j) of the Sarbanes-Oxley Act of 2002) that the rules governing audit partner rotation need to be revised to reduce the likelihood that a partner rotating off an engagement will not fully detach himself/herself from the audit process and thereby hinder the new partner's ability to provide a fresh look at the accounting and auditing issues confronting the company.

We note, however, that the proposal not only requires the rotation of the lead partner and the concurring partner, but goes beyond the mandate of Section 203(j) of the Sarbanes-Oxley Act to also require the rotation of client service partners, other "line" partners, tax partners who perform significant services related to the audit engagement, partners who perform reviews of interim financial information, and partners who conduct the attest engagement to report on the company's internal controls. Furthermore, we note that the proposal considers the merits of having a second firm periodically perform a forensic audit to evaluate the condition of the company's internal controls, the company's accounting and reporting practices, and other matters. In addition to providing a separate review of the potential for and the existence of fraudulent or illegal acts, the proposal suggests the forensic audit could give the audit committee a tool to better evaluate the quality of the financial statement auditors.

Recommendation - Audit Partner Rotation

We believe that the goals of revising the rules regarding partner rotations would be achieved if the rules mandated the rotation of the lead engagement partner only as it is the lead partner who is responsible for setting the audit plan, including deciding when and to what extent specialty partners (such as tax partners or partners dedicated to auditing internal controls) should be deployed. In performing his or her responsibilities, the lead partner will set the general approach and review the conclusions reached by the specialty partners.

While we do not believe it is necessary for the rotation requirement to apply to the concurring review partner in order for the rule change to achieve the Commission's goals, we understand the rotation of the concurring review partner has been mandated by the Sarbanes-Oxley Act. We respectfully urge the Commission, however, not to extend the rotation requirement to engagement partners beyond the lead partner and the concurring partner. The rotation of these other engagement partners will not significantly increase the degree to which a company receives a "fresh look", but will significantly increase the costs to both the audit firm and the company to provide additional training for new specialty partners. Said another way, we believe retaining specialty partners on an engagement is low risk with respect to impairing auditor independence.

Consistent with our view that it is most important to restrict the involvement of the lead engagement partner to ensure that a meaningful fresh look is obtained, we concur with the Commission's proposal for a five (5) year "time out" period prohibiting a lead engagement partner from returning to an engagement.

Recommendation - Forensic Audits

We also respectfully urge the Commission not to adopt rules that would require periodic forensic audits, as we believe professional standards, both formal and informal, currently require company management, the audit committee, and the independent auditors to institute appropriate review procedures and quality control procedures to prevent and detect fraud and illegal acts. The costs associated with executing these periodic forensic audits would outweigh the benefits to the shareholders. Instead, we suggest that the Commission continue in its efforts to hold management teams, audit committees, and independent accountants accountable for their professional responsibilities.

Regarding the suggestion that forensic audits may provide a benefit to audit committees in their assessment of the quality of financial statement auditors, we respectfully suggest that audit committees should be permitted to engage specialists, such as forensic auditors, at their discretion, to assist them in making these determinations.

We appreciate this opportunity to comment on the Commission's proposal regarding strengthening the Commission's requirements regarding auditor independence, and would be happy to discuss any questions the Commission may have regarding this letter. Any such questions should be directed to Gary Ellis, Medtronic's Vice President, Corporate Controller and Treasurer at 763-505-2770 or to me at 763-505-3111.


/s/ Robert L. Ryan

Robert L. Ryan
Senior Vice President and
Chief Financial Officer