Chapter 98, Subchapter I, Section 7214, Subsection (i) · 15 U.S.C. Chapter 98 — PUBLIC COMPANY ACCOUNTING REFORM AND CORPORATE RESPONSIBILITY

Contents

(i)

(1)In this subsection—

(A)the term “covered issuer” means an issuer that is required to file reports under section 78m or 78o(d) of this title; and

(B)the term “non-inspection year” means, with respect to a covered issuer, a year—

(i)during which the Commission identifies the covered issuer under paragraph (2)(A) with respect to every report described in subparagraph (A) filed by the covered issuer during that year; and

(ii)that begins after December 18, 2020.

(2)The Commission shall—

(A)identify each covered issuer that, with respect to the preparation of the audit report on the financial statement of the covered issuer that is included in a report described in paragraph (1)(A) filed by the covered issuer, retains a registered public accounting firm that has a branch or office that—

(i)is located in a foreign jurisdiction; and

(ii)the Board is unable to inspect or investigate completely because of a position taken by an authority in a foreign jurisdiction, 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 Commission documentation that establishes that the covered issuer is not owned or controlled by a governmental entity in the foreign jurisdiction described in subparagraph (A)(i).

(3)

(A)If the Commission determines that a covered issuer has 2 consecutive non-inspection years, the Commission shall prohibit the securities 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 securities.

(B)If, after the Commission imposes a prohibition on a covered issuer under subparagraph (A), the covered issuer certifies to the Commission that the covered issuer has retained a registered public accounting firm that the Board has inspected under this section to the satisfaction of the Commission, the Commission shall end that prohibition.

(C)If, after the Commission ends a prohibition under subparagraph (B) or (D) with respect to a covered issuer, the Commission determines that the covered issuer has a non-inspection year, the Commission shall prohibit the securities of the covered issuer from being traded—

(i)on a national securities exchange; or

(D)If, after the end of the 5-year period beginning on the date on which the Commission imposes a prohibition on a covered issuer under subparagraph (C), the covered issuer certifies to the Commission that the covered issuer will retain a registered public accounting firm that the Board is able to inspect under this section, the Commission shall end that prohibition.

(4)Not later than 90 days after December 18, 2020, the Commission shall issue rules that establish the manner and form in which a covered issuer shall make a submission required under paragraph (2)(B).

United States Government work; public domain under 17 U.S.C. § 105.

Defined terms · 27

Show every defined 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.
audit
means an examination of the financial statements, reports, documents, procedures, controls, or notices of any issuer, broker, or dealer by an independent public accounting firm in accordance with the rules of the Board or the Commission, for the purpose of expressing an opinion on the financial statements or providing an audit report.
audit committee
means—
audit report
has the meaning given the term in section 7201(a) of this title;
Board
means the Public Company Accounting Oversight Board established under section 7211 of this title.
broker
means a broker (as such term is defined in section 78c(a)(4) of this title) that is required to file a balance sheet, income statement, or other financial statement under section 78q(e)(1)(A) of this title, where such balance sheet, income statement, or financial statement is required to be certified by a registered public accounting firm.
code of ethics
means such standards as are reasonably necessary to promote—
Commission
means the Securities and Exchange Commission;
covered issuer
means an issuer that is required to file reports under section 78m or 78o(d) of this title;
dealer
means a dealer (as such term is defined in section 78c(a)(5) of this title) that is required to file a balance sheet, income statement, or other financial statement under section 78q(e)(1)(A) of this title, where such balance sheet, income statement, or financial statement is required to be certified by a registered public accounting firm.
foreign auditor oversight authority
means any governmental body or other entity empowered by a foreign government to conduct inspections of public accounting firms or otherwise to administer or enforce laws related to the regulation of public accounting firms.
foreign issuer
has the meaning given the term in section 240.3b–4 of title 17, Code of Federal Regulations, or any successor regulation.
foreign public accounting firm
means a public accounting firm that is organized and operates under the laws of a foreign government or political subdivision thereof.
individual account plan
has the meaning provided in section 1002(34) of title 29, except that such term shall not include a one-participant retirement plan (within the meaning of section 1021(i)(8)(B) of title 29).
issuer
means an issuer (as defined in section 78c of this title), the securities of which are registered under section 78l of this title, or that is required to file reports under section 78o(d) of this title, or that files or has filed a registration statement that has not yet become effective under the Securities Act of 1933 (15 U.S.C. 77a et seq.), and that it has not withdrawn.
mandatory rotation
refers to the imposition of a limit on the period of years in which a particular registered public accounting firm may be the auditor of record for a particular issuer.
non-audit services
means any professional services provided to an issuer by a registered public accounting firm, other than those provided to an issuer in connection with an audit or a review of the financial statements of an issuer.
non-inspection year
means, with respect to a covered issuer, a year—
professional standards
means—
proposed rule
means any proposed rule of the Board, and any modification of any such rule.
public accounting firm
means—
registered public accounting firm
means a public accounting firm registered with the Board in accordance with this Act.
rules of the Board
means the bylaws and rules of the Board (as submitted to, and approved, modified, or amended by the Commission, in accordance with section 7217 of this title), and those stated policies, practices, and interpretations of the Board that the Commission, by rule, may deem to be rules of the Board, as necessary or appropriate in the public interest or for the protection of investors.
securities laws
means the provisions of law referred to in section 78c(a)(47) of this title and includes the rules, regulations, and orders issued by the Commission thereunder.
security
has the same meaning as in section 78c(a) of this title.
self-regulatory organization
has the same meaning as in section 78c(a) of this title.
State
means any State of the United States, the District of Columbia, Puerto Rico, the Virgin Islands, or any other territory or possession of the United States.