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15 U.S.C. § 7214a — Auditing, quality control, and independence standards and rules

Federal law — U.S. Code and appendices · legal_authorities

15 U.S.C. § 7214a — Auditing, quality control, and independence standards and rules

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Stable record: federal_law:legal_authorities:record_usc_27a6970414dff101d0a6c5ae
Source file: Laws/federal/codes/united-states-code/title-15/section-7214a-auditing-quality-control-and-independence-standards-and-rules--e50ddd5678.md
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Source location: Title 15, Chapter 98, § 7214a; chapter-098-public-company-accounting-reform-and-corporate-responsibility.md

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**(a) Auditing, quality control, and ethics standards** (1) **In general** — The Board shall, by rule, establish, including, to the extent it determines appropriate, through adoption of standards proposed by 1 or more professional groups of accountants designated pursuant to paragraph (3)(A) or advisory groups convened pursuant to paragraph (4), and amend or otherwise modify or alter, such auditing and related attestation standards, such quality control standards, such ethics standards, and such independence standards to be used by registered public accounting firms in the preparation and issuance of audit reports, as required by this Act or the rules of the Commission, or as may be necessary or appropriate in the public interest or for the protection of investors. (2) **Rule requirements** — In carrying out paragraph (1), the Board— (A) shall include in the auditing standards that it adopts, requirements that each registered public accounting firm shall— (i) prepare, and maintain for a period of not less than 7 years, audit work papers, and other information related to any audit report, in sufficient detail to support the conclusions reached in such report; (ii) provide a concurring or second partner review and approval of such audit report (and other related information), and concurring approval in its issuance, by a qualified person (as prescribed by the Board) associated with the public accounting firm, other than the person in charge of the audit, or by an independent reviewer (as prescribed by the Board); and (iii) in each audit report for an issuer, describe the scope of the auditor’s testing of the internal control structure and procedures of the issuer, required by [section 7262(b) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section7262/b&num=0&edition=prelim), and present (in such report or in a separate report)— (I) the findings of the auditor from such testing; (II) an evaluation of whether such internal control structure and procedures— (aa) include maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the issuer; (bb) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the issuer are being made only in accordance with authorizations of management and directors of the issuer; and (III) a description, at a minimum, of material weaknesses in such internal controls, and of any material noncompliance found on the basis of such testing. (B) shall include, in the quality control standards that it adopts with respect to the issuance of audit reports, requirements for every registered public accounting firm relating to— (i) monitoring of professional ethics and independence from issuers, brokers, and dealers on behalf of which the firm issues audit reports; (ii) consultation within such firm on accounting and auditing questions; (iii) supervision of audit work; (iv) hiring, professional development, and advancement of personnel; (v) the acceptance and continuation of engagements; (vi) internal inspection; and (vii) such other requirements as the Board may prescribe, subject to subsection (a)(1). (3) **Authority to adopt other standards** (A) *In general* — In carrying out this subsection, the Board— (i) may adopt as its rules, subject to the terms of [section 7217 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section7217&num=0&edition=prelim), any portion of any statement of auditing standards or other professional standards that the Board determines satisfy the requirements of paragraph (1), and that were proposed by 1 or more professional groups of accountants that shall be designated or recognized by the Board, by rule, for such purpose, pursuant to this paragraph or 1 or more advisory groups convened pursuant to paragraph (4); and (ii) notwithstanding clause (i), shall retain full authority to modify, supplement, revise, or subsequently amend, modify, or repeal, in whole or in part, any portion of any statement described in clause (i). (B) *Initial and transitional standards* — The Board shall adopt standards described in subparagraph (A)(i) as initial or transitional standards, to the extent the Board determines necessary, prior to a determination of the Commission under [section 7211(d) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section7211/d&num=0&edition=prelim), and such standards shall be separately approved by the Commission at the time of that determination, without regard to the procedures required by [section 7217 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section7217&num=0&edition=prelim) that otherwise would apply to the approval of rules of the Board. (C) *Transition period for emerging growth companies* — Any rules of the Board requiring mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer (auditor discussion and analysis) shall not apply to an audit of an emerging growth company, as defined in [section 78c of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section78c&num=0&edition=prelim). Any additional rules adopted by the Board after April 5, 2012, shall not apply to an audit of any emerging growth company, unless the Commission determines that the application of such additional requirements is necessary or appropriate in the public interest, after considering the protection of investors and whether the action will promote efficiency, competition, and capital formation. (4) **Advisory groups** — The Board shall convene, or authorize its staff to convene, such expert advisory groups as may be appropriate, which may include practicing accountants and other experts, as well as representatives of other interested groups, subject to such rules as the Board may prescribe to prevent conflicts of interest, to make recommendations concerning the content (including proposed drafts) of auditing, quality control, ethics, independence, or other standards required to be established under this section. **(b) Independence standards and rules** The Board shall establish such rules as may be necessary or appropriate in the public interest or for the protection of investors, to implement, or as authorized under, title II of this Act. **(c) Cooperation with designated professional groups of accountants and advisory groups** (1) **In general** — The Board shall cooperate on an ongoing basis with professional groups of accountants designated under subsection (a)(3)(A) and advisory groups convened under subsection (a)(4) in the examination of the need for changes in any standards subject to its authority under subsection (a), recommend issues for inclusion on the agendas of such designated professional groups of accountants or advisory groups, and take such other steps as it deems appropriate to increase the effectiveness of the standard setting process. (2) **Board responses** — The Board shall respond in a timely fashion to requests from designated professional groups of accountants and advisory groups referred to in paragraph (1) for any changes in standards over which the Board has authority. **(d) Evaluation of standard setting process** The Board shall include in the annual report required by [section 7211(h) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section7211/h&num=0&edition=prelim) the results of its standard setting responsibilities during the period to which the report relates, including a discussion of the work of the Board with any designated professional groups of accountants and advisory groups described in paragraphs (3)(A) and (4) of subsection (a), and its pending issues agenda for future standard setting projects.

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Federal law — U.S. Code and appendices · legal_authorities

15 U.S.C. § 7217 — Investigations and disciplinary proceedings

**(a) In general** The Board shall establish, by rule, subject to the requirements of this section, fair procedures for the investigation and disciplining of registered public accounting firms and associated persons of such firms. **(b) Investigations** (1) **Authority** — In accordance with the rules of the Board, the Board may conduct an investigation of any act or practice, or omission to act, by a registered public accounting firm, any associated person of such firm, or both, that may violate any provision of this Act, the rules of the Board, the provisions of the securities laws relating to the preparation and issuance of audit reports and the obligations and liabilities of accountants with respect thereto, including the rules of the Commission issued under this Act, or professional standards, regardless of how the act, practice, or omission is brought to the attention of the Board. (2) **Testimony and document production** — In addition to such other actions as the Board determines to be necessary or appropriate, the rules of the Board may— (A) require the testimony of the firm or of any person associated with a registered public accounting firm, with respect to any matter that the Board considers relevant or material to an investigation; (B) require the production of audit work papers and any other document or information in the possession of a registered public accounting firm or any associated person thereof, wherever domiciled, that the Board considers relevant or material to the investigation, and may inspect the books and records of such firm or associated person to verify the accuracy of any documents or information supplied; (C) request the testimony of, and production of any document in the possession of, any other person, including any client

Source: Supplied U.S. Code snapshot — release unconfirmed · 15 U.S.C. § 7217

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Federal law — U.S. Code and appendices · legal_authorities

12 U.S.C. § 5301 — Regulations

**(a) In general** The Secretary is authorized to promulgate regulations to implement and administer the grant programs and undertakings authorized by this subchapter. **(b) Regulatory authority** Regulations prescribed under this section may contain such classifications, differentiations, or other provisions, and may provide for such adjustments and exceptions for any class of grant programs, undertakings, or eligible entities, as, in the judgment of the Secretary, are necessary or proper to effectuate the purposes of this subchapter, to prevent circumvention or evasion of this subchapter, or to facilitate compliance with this subchapter.

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Federal law — U.S. Code and appendices · legal_authorities

15 U.S.C. § 78c — Definitions and application

**(a) Definitions** When used in this chapter, unless the context otherwise requires— (1) The term “exchange” means any organization, association, or group of persons, whether incorporated or unincorporated, which constitutes, maintains, or provides a market place or facilities for bringing together purchasers and sellers of securities or for otherwise performing with respect to securities the functions commonly performed by a stock exchange as that term is generally understood, and includes the market place and the market facilities maintained by such exchange. (2) The term “facility” when used with respect to an exchange includes its premises, tangible or intangible property whether on the premises or not, any right to the use of such premises or property or any service thereof for the purpose of effecting or reporting a transaction on an exchange (including, among other things, any system of communication to or from the exchange, by ticker or otherwise, maintained by or with the consent of the exchange), and any right of the exchange to the use of any property or service. (3) (A) The term “member” when used with respect to a national securities exchange means (i) any natural person permitted to effect transactions on the floor of the exchange without the services of another person acting as broker, (ii) any registered broker or dealer with which such a natural person is associated, (iii) any registered broker or dealer permitted to designate as a representative such a natural person, and (iv) any other registered broker or dealer which agrees to be regulated by such exchange and with respect to which the exchange undertakes to enforce compliance with the provisions of this chapter, the rules and regulations thereunder, and its own rules. For purposes of section

Source: Supplied U.S. Code snapshot — release unconfirmed · 15 U.S.C. § 78c

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Federal law — U.S. Code and appendices · legal_authorities

15 U.S.C. § 7211 — Definitions

Except as otherwise specifically provided in this Act, in this Act, the following definitions shall apply: (1) **Appropriate State regulatory authority** — The term “appropriate State regulatory authority” means the State agency or other authority responsible for the licensure or other regulation of the practice of accounting in the State or States having jurisdiction over a registered public accounting firm or associated person thereof, with respect to the matter in question. (2) **Audit** — The term “audit” means an examination of the financial statements of any issuer by an independent public accounting firm in accordance with the rules of the Board or the Commission (or, for the period preceding the adoption of applicable rules of the Board under [section 7213 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section7213&num=0&edition=prelim), in accordance with then-applicable generally accepted auditing and related standards for such purposes), for the purpose of expressing an opinion on such statements. (3) **Audit committee** — The term “audit committee” means— (A) a committee (or equivalent body) established by and amongst the board of directors of an issuer for the purpose of overseeing the accounting and financial reporting processes of the issuer and audits of the financial statements of the issuer; and (B) if no such committee exists with respect to an issuer, the entire board of directors of the issuer. (4) **Audit report** — The term “audit report” means a document or other record— (A) prepared following an audit performed for purposes of compliance by an issuer with the requirements of the securities laws; and (B) in which a public accounting firm either— (i) sets forth the opinion of that firm regar

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Federal law — U.S. Code and appendices · legal_authorities

15 U.S.C. § 7214a — Additional disclosure

Page 2327 TITLE 15—COMMERCE AND TRADE § 7214a port on the financial statement of the cov- ered issuer that is included in a report de- scribed in paragraph (1)(A) filed by the cov- ered issuer, retains a registered public ac- counting firm that has a branch or office that— (i) is located in a foreign jurisdiction; and (ii) the Board is unable to inspect or in- vestigate completely because of a position taken by an authority in a foreign juris- diction, as determined by the Board; and (B) require each covered issuer identified under subparagraph (A) to, in accordance with the rules issued by the Commission under paragraph (4), submit to the Commis- sion documentation that establishes that the covered issuer is not owned or controlled by a governmental entity in the foreign ju- risdiction described in subparagraph (A)(i). (3) Trading prohibition after 2 years of non-in- spections (A) In general If the Commission determines that a cov- ered issuer has 2 consecutive non-inspection years, the Commission shall prohibit the se- curities of the covered issuer from being traded— (i) on a national securities exchange; or (ii) through any other method that is within the jurisdiction of the Commission to regulate, including through the method of trading that is commonly referred to as the ‘‘over-the-counter’’ trading of securi- ties. (B) Removal of initial prohibition If, after the Commission imposes a prohi- bition on a covered issuer under subpara- graph (A), the covered issuer certifies to the Commission that the covered issuer has re- tained a registered public accounting firm that the Board has inspected under this sec- tion to the satisfaction of the Commission, the Commission shall end that prohibition. (C) Recurrence of non-inspection years If, af

Source: Supplied 2024 U.S. Code historical extraction · 15 U.S.C. § 7214a

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