This excerpt taken from the GWW 10-K filed Feb 27, 2007.
MANAGEMENTS ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
The management of W.W. Grainger, Inc. (Grainger) is responsible for establishing and maintaining adequate internal control over financial reporting. Graingers internal control system was designed to provide reasonable assurance to Graingers management and Board of Directors regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements under all potential conditions. Therefore, effective internal control over financial reporting provides only reasonable, and not absolute, assurance with respect to the preparation and presentation of financial statements.
Graingers management assessed the effectiveness of Graingers internal control over financial reporting as of December 31, 2006, based on the framework set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control Integrated Framework. Based on its assessment under that framework and the criteria established therein, Graingers management concluded that Graingers internal control over financial reporting was effective as of December 31, 2006.
Ernst & Young LLP, an independent registered public accounting firm, has audited managements assessment of the effectiveness of Graingers internal control over financial reporting as of December 31, 2006, as stated in their report which is included herein.