15 U.S.C. § 7212 — Registration with the Board

Page 2322 TITLE 15—COMMERCE AND TRADE § 7212 (3) to lease, purchase, accept gifts or dona- tions of or otherwise acquire, improve, use, sell, exchange, or convey, all of or an interest in any property, wherever situated; (4) to appoint such employees, accountants, attorneys, and other agents as may be nec- essary or appropriate, and to determine their qualifications, define their duties, and fix their salaries or other compensation (at a level that is comparable to private sector self- regulatory, accounting, technical, super- visory, or other staff or management posi- tions); (5) to allocate, assess, and collect accounting support fees established pursuant to section 7219 of this title, for the Board, and other fees and charges imposed under this subchapter; and (6) to enter into contracts, execute instru- ments, incur liabilities, and do any and all other acts and things necessary, appropriate, or incidental to the conduct of its operations and the exercise of its obligations, rights, and powers imposed or granted by this subchapter. (g) Rules of the Board The rules of the Board shall, subject to the ap- proval of the Commission— (1) provide for the operation and administra- tion of the Board, the exercise of its authority, and the performance of its responsibilities under this Act; (2) permit, as the Board determines nec- essary or appropriate, delegation by the Board of any of its functions to an individual mem- ber or employee of the Board, or to a division of the Board, including functions with respect to hearing, determining, ordering, certifying, reporting, or otherwise acting as to any mat- ter, except that— (A) the Board shall retain a discretionary right to review any action pursuant to any such delegated function, upon its own mo- tion; (B) a person shall be entitled to a review by the Board with respect to any matter so delegated, and the decision of the Board upon such review shall be deemed to be the action of the Board for all purposes (includ- ing appeal or review thereof); and (C) if the right to exercise a review de- scribed in subparagraph (A) is declined, or if no such review is sought within the time stated in the rules of the Board, then the ac- tion taken by the holder of such delegation shall for all purposes, including appeal or re- view thereof, be deemed to be the action of the Board; (3) establish ethics rules and standards of conduct for Board members and staff, includ- ing a bar on practice before the Board (and the Commission, with respect to Board-related matters) of 1 year for former members of the Board, and appropriate periods (not to exceed 1 year) for former staff of the Board; and (4) provide as otherwise required by this Act. (h) Annual report to the Commission The Board shall submit an annual report (in- cluding its audited financial statements) to the Commission, and the Commission shall transmit a copy of that report to the Committee on Bank- ing, Housing, and Urban Affairs of the Senate, and the Committee on Financial Services of the House of Representatives, not later than 30 days after the date of receipt of that report by the Commission. (Pub. L. 107–204, title I, § 101, July 30, 2002, 116 Stat. 750; Pub. L. 111–203, title IX, § 982(b), July 21, 2010, 124 Stat. 1928.) Editorial Notes REFERENCES IN TEXT This Act, referred to in subsecs. (b), (c)(5), (6), (f), and (g)(1), (4), is Pub. L. 107–204, July 30, 2002, 116 Stat. 745, known as the Sarbanes-Oxley Act of 2002. For complete classification of this Act to the Code, see Tables. The District of Columbia Nonprofit Corporation Act, referred to in subsec. (b), is Pub. L. 87–569, Aug. 6, 1962, 76 Stat. 265, which is not classified to the Code. CONSTITUTIONALITY For information regarding the constitutionality of certain provisions of this section, see the Table of Laws Held Unconstitutional in Whole or in Part by the Su- preme Court on the Constitution Annotated website, constitution.congress.gov. AMENDMENTS 2010—Subsec. (a). Pub. L. 111–203, § 982(b)(2), sub- stituted ‘‘companies that’’ for ‘‘public companies that’’ and struck out ‘‘for companies the securities of which are sold to, and held by and for, public investors’’ after ‘‘independent audit reports’’. Subsecs. (c)(1), (2), (e)(1). Pub. L. 111–203, § 982(b)(1), substituted ‘‘issuers, brokers, and dealers’’ for ‘‘issuers’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2010 AMENDMENT Amendment by Pub. L. 111–203 effective 1 day after July 21, 2010, except as otherwise provided, see section 4 of Pub. L. 111–203, set out as an Effective Date note under section 5301 of Title 12, Banks and Banking. § 7212. Registration with the Board (a) Mandatory registration It shall be unlawful for any person that is not a registered public accounting firm to prepare or issue, or to participate in the preparation or issuance of, any audit report with respect to any issuer, broker, or dealer. (b) Applications for registration (1) Form of application A public accounting firm shall use such form as the Board may prescribe, by rule, to apply for registration under this section. (2) Contents of applications Each public accounting firm shall submit, as part of its application for registration, in such detail as the Board shall specify— (A) the names of all issuers, brokers, and dealers for which the firm prepared or issued audit reports during the immediately pre- ceding calendar year, and for which the firm expects to prepare or issue audit reports dur- ing the current calendar year; (B) the annual fees received by the firm from each such issuer, broker, or dealer for audit services, other accounting services, and non-audit services, respectively; Page 2323 TITLE 15—COMMERCE AND TRADE § 7213 (C) such other current financial informa- tion for the most recently completed fiscal year of the firm as the Board may reason- ably request; (D) a statement of the quality control poli- cies of the firm for its accounting and audit- ing practices; (E) a list of all accountants associated with the firm who participate in or con- tribute to the preparation of audit reports, stating the license or certification number of each such person, as well as the State li- cense numbers of the firm itself; (F) information relating to criminal, civil, or administrative actions or disciplinary proceedings pending against the firm or any associated person of the firm in connection with any audit report; (G) copies of any periodic or annual disclo- sure filed by an issuer, broker, or dealer with the Commission during the immediately pre- ceding calendar year which discloses ac- counting disagreements between such issuer, broker, or dealer and the firm in connection with an audit report furnished or prepared by the firm for such issuer, broker, or dealer; and (H) such other information as the rules of the Board or the Commission shall specify as necessary or appropriate in the public inter- est or for the protection of investors. (3) Consents Each application for registration under this subsection shall include— (A) a consent executed by the public ac- counting firm to cooperation in and compli- ance with any request for testimony or the production of documents made by the Board in the furtherance of its authority and re- sponsibilities under this subchapter (and an agreement to secure and enforce similar con- sents from each of the associated persons of the public accounting firm as a condition of their continued employment by or other as- sociation with such firm); and (B) a statement that such firm under- stands and agrees that cooperation and com- pliance, as described in the consent required by subparagraph (A), and the securing and enforcement of such consents from its asso- ciated persons, in accordance with the rules of the Board, shall be a condition to the con- tinuing effectiveness of the registration of the firm with the Board. (c) Action on applications (1) Timing The Board shall approve a completed appli- cation for registration not later than 45 days after the date of receipt of the application, in accordance with the rules of the Board, unless the Board, prior to such date, issues a written notice of disapproval to, or requests more in- formation from, the prospective registrant. (2) Treatment A written notice of disapproval of a com- pleted application under paragraph (1) for reg- istration shall be treated as a disciplinary sanction for purposes of sections 7215(d) and 7217(c) of this title. (d) Periodic reports Each registered public accounting firm shall submit an annual report to the Board, and may be required to report more frequently, as nec- essary to update the information contained in its application for registration under this sec- tion, and to provide to the Board such additional information as the Board or the Commission may specify, in accordance with subsection (b)(2). (e) Public availability Registration applications and annual reports required by this subsection, or such portions of such applications or reports as may be des- ignated under rules of the Board, shall be made available for public inspection, subject to rules of the Board or the Commission, and to applica- ble laws relating to the confidentiality of pro- prietary, personal, or other information con- tained in such applications or reports, provided that, in all events, the Board shall protect from public disclosure information reasonably identi- fied by the subject accounting firm as propri- etary information. (f) Registration and annual fees The Board shall assess and collect a registra- tion fee and an annual fee from each registered public accounting firm, in amounts that are suf- ficient to recover the costs of processing and re- viewing applications and annual reports. (Pub. L. 107–204, title I, § 102, July 30, 2002, 116 Stat. 753; Pub. L. 111–203, title IX, § 982(c), July 21, 2010, 124 Stat. 1928.) Editorial Notes AMENDMENTS 2010—Subsec. (a). Pub. L. 111–203, § 982(c)(1), sub- stituted ‘‘It’’ for ‘‘Beginning 180 days after the date of the determination of the Commission under section 7211(d) of this title, it’’. Subsec. (b)(2)(A). Pub. L. 111–203, § 982(c)(2)(A), sub- stituted ‘‘issuers, brokers, and dealers’’ for ‘‘issuers’’. Subsec. (b)(2)(B), (G). Pub. L. 111–203, § 982(c)(2)(B), substituted ‘‘issuer, broker, or dealer’’ for ‘‘issuer’’ wherever appearing. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2010 AMENDMENT Amendment by Pub. L. 111–203 effective 1 day after July 21, 2010, except as otherwise provided, see section 4 of Pub. L. 111–203, set out as an Effective Date note under section 5301 of Title 12, Banks and Banking. § 7213. Auditing, quality control, and independ- ence standards and rules (a) Auditing, quality control, and ethics stand- ards (1) In general The Board shall, by rule, establish, includ- ing, to the extent it determines appropriate, through adoption of standards proposed by 1 or more professional groups of accountants des- ignated pursuant to paragraph (3)(A) or advi- sory groups convened pursuant to paragraph (4), and amend or otherwise modify or alter, such auditing and related attestation stand- ards, such quality control standards, such eth-