PUBLIC LA W 107–204—JULY 30, 2002 116 STA T. 745
Public Law 107–204
107th Congress
An Act
To protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws, and for other purposes.
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the ‘‘Sarbanes-
Oxley Act of 2002’’.
(b) TABLE OF CONTENTS.—The table of contents for this Act
is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
Sec. 3. Commission rules and enforcement.
TITLE I—PUBLIC COMPANY ACCOUNTING OVERSIGHT BOARD
Sec. 101. Establishment; administrative provisions.
Sec. 102. Registration with the Board.
Sec. 103. Auditing, quality control, and independence standards and rules.
Sec. 104. Inspections of registered public accounting firms.
Sec. 105. Investigations and disciplinary proceedings.
Sec. 106. Foreign public accounting firms.
Sec. 107. Commission oversight of the Board.
Sec. 108. Accounting standards.
Sec. 109. Funding.
TITLE II—AUDITOR INDEPENDENCE
Sec. 201. Services outside the scope of practice of auditors.
Sec. 202. Preapproval requirements.
Sec. 203. Audit partner rotation.
Sec. 204. Auditor reports to audit committees.
Sec. 205. Conforming amendments.
Sec. 206. Conflicts of interest.
Sec. 207. Study of mandatory rotation of registered public accounting firms. Sec. 208. Commission authority.
Sec. 209. Considerations by appropriate State regulatory authorities.
TITLE III—CORPORA TE RESPONSIBILITY
Sec. 301. Public company audit committees.
Sec. 302. Corporate responsibility for financial reports.
Sec. 303. Improper influence on conduct of audits.
Sec. 304. Forfeiture of certain bonuses and profits.
Sec. 305. Officer and director bars and penalties.
Sec. 306. Insider trades during pension fund blackout periods.
Sec. 307. Rules of professional responsibility for attorneys.
Sec. 308. Fair funds for investors.
TITLE IV—ENHANCED FINANCIAL DISCLOSURES
Sec. 401. Disclosures in periodic reports.
Sec. 402. Enhanced conflict of interest provisions.
Sec. 403. Disclosures of transactions involving management and principal stock- holders.
July 30, 2002
[H.R. 3763]
Sarbanes-Oxley
Act of 2002.
Corporate
responsibility.
15 USC 7201
note.
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Sec. 404. Management assessment of internal controls.
Sec. 405. Exemption.
Sec. 406. Code of ethics for senior financial officers.
Sec. 407. Disclosure of audit committee financial expert.
Sec. 408. Enhanced review of periodic disclosures by issuers.
Sec. 409. Real time issuer disclosures.
TITLE V—ANALYST CONFLICTS OF INTEREST
Sec. 501. Treatment of securities analysts by registered securities associations and national securities exchanges.
TITLE VI—COMMISSION RESOURCES AND AUTHORITY
Sec. 601. Authorization of appropriations.
Sec. 602. Appearance and practice before the Commission.
Sec. 603. Federal court authority to impose penny stock bars.
Sec. 604. Qualifications of associated persons of brokers and dealers.
TITLE VII—STUDIES AND REPORTS
Sec. 701. GAO study and report regarding consolidation of public accounting firms. Sec. 702. Commission study and report regarding credit rating agencies.
Sec. 703. Study and report on violators and violations
Sec. 704. Study of enforcement actions.
Sec. 705. Study of investment banks.
TITLE VIII—CORPORA TE AND CRIMINAL FRAUD ACCOUNTABILITY
Sec. 801. Short title.
Sec. 802. Criminal penalties for altering documents.
Sec. 803. Debts nondischargeable if incurred in violation of securities fraud laws. Sec. 804. Statute of limitations for securities fraud.
Sec. 805. Review of Federal Sentencing Guidelines for obstruction of justice and ex-
tensive criminal fraud.
Sec. 806. Protection for employees of publicly traded companies who provide evidence
of fraud.
Sec. 807. Criminal penalties for defrauding shareholders of publicly traded companies.
TITLE IX—WHITE-COLLAR CRIME PENALTY ENHANCEMENTS
Sec. 901. Short title.
Sec. 902. Attempts and conspiracies to commit criminal fraud offenses.
Sec. 903. Criminal penalties for mail and wire fraud.
Sec. 904. Criminal penalties for violations of the Employee Retirement Income Se-
curity Act of 1974.
Sec. 905. Amendment to sentencing guidelines relating to certain white-collar offenses. Sec. 906. Corporate responsibility for financial reports.
TITLE X—CORPORA TE TAX RETURNS
Sec. 1001. Sense of the Senate regarding the signing of corporate tax returns by
chief executive officers.
TITLE XI—CORPORA TE FRAUD AND ACCOUNTABILITY
Sec. 1101. Short title.
Sec. 1102. Tampering with a record or otherwise impeding an official proceeding. Sec. 1103. Temporary freeze authority for the Securities and Exchange Commis-
sion.
Sec. 1104. Amendment to the Federal Sentencing Guidelines.
Sec. 1105. Authority of the Commission to prohibit persons from serving as officers
or directors.
Sec. 1106. Increased criminal penalties under Securities Exchange Act of 1934.
15 USC 7201. SEC. 2. DEFINITIONS.
(a) IN GENERAL.—In this Act, the following definitions shall
apply:
(1) APPROPRIA TE STA TE REGULA TORY 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
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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 103, 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 regarding
a financial statement, report, or other document; or
(ii) asserts that no such opinion can be expressed.
(5) BOARD.—The term ‘‘Board’’ means the Public Company Accounting Oversight Board established under section 101.
(6) COMMISSION.—The term ‘‘Commission’’ means the Securities and Exchange Commission.
(7) ISSUER.—The term ‘‘issuer’’ means an issuer (as defined
in section 3 of the Securities Exchange Act of 1934 (15 U.S.C.
78c)), the securities of which are registered under section 12
of that Act (15 U.S.C. 78l), or that is required to file reports
under section 15(d) (15 U.S.C. 78o(d)), 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.
(8) NON-AUDIT SERVICES.—The term ‘‘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.
(9) PERSON ASSOCIA TED WITH A PUBLIC ACCOUNTING FIRM.—
(A) IN GENERAL.—The terms ‘‘person associated with
a public accounting firm’’ (or with a ‘‘registered public
accounting firm’’) and ‘‘associated person of a public
accounting firm’’ (or of a ‘‘registered publ ic accounting
firm’’) mean any individual proprietor, partner, share-
holder, principal, accountant, or other professional
employee of a public accounting firm, or any other inde-
pendent contractor or entity that, in connection with the
preparation or issuance of any audit report—
116 STA T. 748 PUBLIC LA W 107–204—JULY 30, 2002
(i) shares in the profits of, or receives compensation
in any other form from, that firm; or
(ii) participates as agent or otherwise on behalf
of such accounting firm in any activity of that firm.
(B) EXEMPTION AUTHORITY.—The Board may, by rule, exempt persons engaged only in ministerial tasks from
the definition in subparagraph (A), to the extent that the
Board determines that any such exemption is consistent
with the purposes of this Act, the public interest, or the protection of investors.
(10) PROFESSIONAL STANDARDS.—The term ‘‘professional standards’’ means—
(A) accounting principles that are—
(i) established by the standard setting body
described in section 19(b) of the Securities Act of 1933,
as amended by this Act, or prescribed by the Commission under section 19(a) of that Act (15 U.S.C. 17a(s))
or section 13(b) of the Securities Exchange Act of 1934
(15 U.S.C. 78a(m)); and
(ii) relevant to audit reports for particular issuers,
or dealt with in the quality control system of a particular registered public accounting firm; and
(B) auditing standards, standards for attestation engagements, quality control polic ies and procedures, ethical and competency standards, and independence standards (including rules implementing title II) that the Board
or the Commission determines—
(i) relate to the preparation or issuance of audit
reports for issuers; and
(ii) are established or adopted by the Board under
section 103(a), or are promulgated as rules of the Commission.
(11) PUBLIC ACCOUNTING FIRM.—The term ‘‘public accounting firm’’ means—
(A) a proprietorship, partnership, incorporated association, corporation, limited liability company, limited liability partnership, or other legal entity that is engaged in the
practice of public accounting or preparing or issuing audit reports; and
(B) to the extent so designated by the rules of the
Board, any associated person of any entity described in
subparagraph (A).
(12) REGISTERED PUBLIC ACCOUNTING FIRM.—The term ‘‘registered public accounting firm’’ means a public accounting firm
registered with the Board in accordance with this Act.
(13) RULES OF THE BOARD.—The term ‘‘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 107), 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.
(14) SECURITY.—The term ‘‘security’’ has the same meaning
as in section 3(a) of the Securities Exchange Act of 1934 (15
U.S.C. 78c(a)).
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(15) SECURITIES LA WS.—The term ‘‘securities laws’’ means
the provisions of law referred to in section 3(a)(47) of the
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(47)), as
amended by this Act, and includes the rules, regulations, and
orders issued by the Commission thereunder.
(16) STA TE.—The term ‘‘State’’ means any State of the
United States, the District of Columbia, Puerto Rico, the V irgin Islands, or any other territory or possession of the United
States.
(b) CONFORMING AMENDMENT.—Section 3(a)(47) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(47)) is amended by
inserting ‘‘the Sarbanes-Oxley Act of 2002,’’ before ‘‘the Public’’. SEC. 3. COMMISSION RULES AND ENFORCEMENT. 15 USC 7202.
(a) REGULA TORY ACTION.—The Commission shall promulgate such rules and regulations, as may be necessary or appropriate
in the public interest or for the protection of investors, and in furtherance of this Act.
(b) ENFORCEMENT.—
(1) IN GENERAL.—A violation by any person of this Act,
any rule or regulation of the Commission issued under this
Act, or any rule of the Board shall be treated for all purposes
in the same manner as a violation of the Securities Exchange
Act of 1934 (15 U.S.C. 78a et seq.) or the rules and regulations
issued thereunder, consistent with the provisions of this Act,
and any such person shall be subject to the same penalties,
and to the same extent, as for a violation of that Act or
such rules or regulations.
(2) INVESTIGA TIONS, INJUNCTIONS, AND PROSECUTION OF OFFENSES.—Section 21 of the Securities Exchange Act of 1934
(15 U.S.C. 78u) is amended—
(A) in subsection (a)(1), by inserting ‘‘the rules of the
Public Company Accounting Oversight Board, of which such
person is a registered public accounting firm or a person
associated with such a firm,’’ after ‘‘is a participant,’’;
(B) in subsection (d)(1), by inserting ‘‘the rules of the
Public Company Accounting Oversight Board, of which such
person is a registered public accounting firm or a person
associated with such a firm,’’ after ‘‘is a participant,’’;
(C) in subsection (e), by inserting ‘‘the rules of the
Public Company Accounting Oversight Board, of which such
person is a registered public accounting firm or a person
associated wit h such a firm,’’ after ‘‘is a participant,’’; and
(D) in subsection (f), by inserting ‘‘or the Public Company Accounting Oversight Board’’ after ‘‘self-regulatory organization’’ each place that term appears.
(3) CEASE-AND-DESIST PROCEEDINGS.—Section 21C(c)(2) of
the Securities Exchange Act of 1934 (15 U.S.C. 78u–3(c)(2))
is amended by inserting ‘‘registered public accounting firm (as
defined in section 2 of the Sarbanes-Oxley Act of 2002),’’ after
‘‘government securities dealer,’’.
(4) ENFORCEMENT BY FEDERAL BANKING AGENCIES.—Section 12(i) of the Securities Exchange Act of 1934 (15 U.S.C. 78l(i))
is amended by—
(A) striking ‘‘sections 12,’’ each place it appears and
inserting ‘‘sections 10A(m), 12,’’; and
116 STA T. 750 PUBLIC LA W 107–204—JULY 30, 2002
(B) striking ‘‘and 16,’’ each place it appears and
inserting ‘‘and 16 of this Act, and sections 302, 303, 304,
306, 401(b), 404, 406, and 407 of the Sarbanes-Oxley Act
of 2002,’’.
(c) EFFECT ON COMMISSION AUTHORITY.—Nothing in this Act
or the rules of the Board shall be construed to impair or limit—
(1) the authority of the Commission to regulate the
accounting profession, accounting firms, or persons associated
with such firms for purposes of enforcement of the securities
laws;
(2) the authority of the Commission to set standards for
accounting or auditing practices or auditor independence,
derived from other provisions of the securities laws or the
rules or regulations thereunder, for purposes of the preparation
and issuance of any audit report, or otherwise under applicable
law; or
(3) the ability of the Commission to take, on the initiative
of the Commission, legal, administrative, or disciplinary action
against any registered public accounting firm or any associated
person thereof.
TITLE I—PUBLIC COMPANY
ACCOUNTING OVERSIGHT BOARD
15 USC 7211. SEC. 101. ESTABLISHMENT; ADMINISTRA TIVE PROVISIONS.
(a) ESTABLISHMENT OF BOARD.—There is established the Public
Company Accounting Oversight Board, to oversee the audit of public companies that are subject to the securities laws, and related matters,
in order to protect the interests of investors and further
the public interest in the preparation of informative, accurate,
and independent audit reports for companies the securities of which
are sold to, and held by and for, public investors. The Board shall
be a body corporate, operate as a nonprofit corporation, and have
succession until dissolved by an Act of Congress.
(b) STA TUS.—The Board shall not be an agency or establishment
of the United States Government, and, except as otherwise provided
in this Act, shall be subject to, and have all the powers conferred
upon a nonprofit corporation by, the District of Columbia Nonprofit
Corporation Act. No member or person employed by, or agent for,
the Board shall be deemed to be an officer or employee of or
agent for the Federal Government by reason of such service.
(c) DUTIES OF THE BOARD.—The Board shall, subject to action by the Commission under section 107, and once a determination
is made by the Commission under subsection (d) of this section—(1) register public accounting firms that prepare audit
reports for issuers, in accordance with section 102;
(2) establish or adopt, or both, by rule, auditing, quality
control, ethics, independence, and other standards relating to
the preparation of audit reports for issuers, in accordance with section 103;
(3) conduct inspections of registered public accounting
firms, in accordance with section 104 and the rules of the Board;
(4) conduct investigations and disciplinary proceedings concerning, and impose appropriate sanctions where justified upon,
PUBLIC LA W 107–204—JULY 30, 2002 116 STA T. 751
registered public accounting firms and associated persons of
such firms, in accordance with section 105;
(5) perform such other duties or functions as the Board
(or the Commission, by rule or order) determines are necessary
or appropriate to promote high professional standards among,
and improve the quality of audit services offered by, registered public accounting firms and associated persons thereof, or other- wise to carry out this Act, in order to protect investors, or
to further the public interest;
(6) enforce compliance with this Act, the rules of the Board, professional standards, and the securities laws relating to the preparation and issuance of audit reports and the obligations
and liabilities of accountants with respect thereto, by registered public accounting firms and associated persons thereof; and
(7) set the budget and manage the operations of the Board
and the staff of the Board.
(d) COMMISSION DETERMINA TION.—The members of the Board shall take such action (including hiring of staff, proposal of rules,
and adoption of initial and transitional auditing and other professional standards) as may be necessary or appropriate to enable
the Commission to determine, not later than 270 days after the
date of enactment of this Act, that the Board is so organized
and has the capacity to carry out the requirements of this title,
and to enforce compliance with this title by registered public accounting firms and associated persons thereof. The Commission shall be responsible, prior to the appointment of the Board, for
the planning for the establishment and administrative transition
to the Board’s operation.
(e) BOARD MEMBERSHIP.—
(1) COMPOSITION.—The Board shall have 5 members, appointed from among prominent individuals of integrity and reputation who have a demonstrated commitment to the
interests of investors and the public, and an understanding
of the responsibilities for and nature of the financial disclosures required of issuers under the securities laws and the obligations
of accountants with respect to the preparation and issuance
of audit reports with respect to such disclosures.
(2) LIMITA TION.—Two members, and only 2 members, of
the Board shall be or have been certified public accountants
pursuant to the laws of 1 or more States, provided that, if
1 of those
2 members is the chairperson, he or she may not
have been a practicing certified public accountant for at least
5 years prior to his or her appointment to the Board.
(3) FULL-TIME INDEPENDENT SERVICE.—Each member of the Board shall serve on a full-time basis, and may not, concurrent
with service on the Board, be employed by any other person
or engage in any other professional or business activity. No member of the Board may share in any of the profits of,
or receive payments from, a public accounting firm (or any
other person, as determined by rule of the Commission), other
than fixed continuing payments, subject to such conditions as
the Commission may impose, under standard arrangements
for the retirement of members of public accounting firms.
(4) APPOINTMENT OF BOARD MEMBERS.—
(A) INITIAL BOARD.—Not later than 90 days after the Deadline. date of enactment of this Act, the Commission, after consultation with the Chairman of the Board of Governors
116 STA T. 752 PUBLIC LA W 107–204—JULY 30, 2002
of the Federal Reserve System and the Secretary of the Treasury, shall appoint the chairperson and other initial members of the Board, and shall designate a term of service
for each.
(B) V ACANCIES.—A vacancy on the Board shall not
affect the powers of the Board, but shall be filled in the
same manner as provided for appointments under this section.
(5) TERM OF SERVICE.—
(A) IN GENERAL.—The term of service of each Board member shall be 5 years, and until a successor is appointed, except that—
(i) the terms of office of the initial Board members
(other than the chairperson) shall expire in annual increments, 1 on each of the first 4 anniversaries of
the initial date of appointment; and
(ii) any Board member appointed to fill a vacancy
occurring before the expiration of the term for which
the predecessor was appointed shall be appointed only
for the remainder of that term.
(B) TERM LIMITA TION.—No person may serve as a member of the Board, or as chairperson of the Board,
for more than 2 terms, whether or not such terms of
service are consecutive.
(6) REMOV AL FROM OFFICE.—A member of the Board may be removed by the Commission from office, in accordance with section 107(d)(3), for good cause shown before the expiration of the term of that member.
(f) POWERS OF THE BOARD.—In addition to any authority granted to the Board otherwise in this Act, the Board shall have the power, subject to section 107—
(1) to sue and be sued, complain and defend, in its corporate name and through its own counsel, with the approval of the Commission, in any Federal, State, or other court;
(2) to conduct its operations and maintain offices, and
to exercise all other rights and powers authorized by this Act,
in any State, without regard to any qualification, licensing,
or other provision of law in effect in such State (or a political subdivision thereof);
(3) to lease, purchase, accept gifts or donations 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 necessary 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, supervisory,
or other staff or management positions);
(5) to allocate, assess, and collect accounting support fees
established pursuant to section 109, for the Board, and other
fees and charges imposed under this title; and
Contracts. (6) to enter into contracts, execute instruments, 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 title.
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(g) RULES OF THE BOARD.—The rules of the Board shall, subject
to the approval of the Commission—
(1) provide for the operation and administration of the
Board, the exercise of its authority, and the performance of
its responsibilities under this Act;
(2) permit, as the Board determines necessary or appro-
priate, delegation by the Board of any of its functions to an
individual member or employee of the Board, or to a division
of the Board, including functions with respect to hearing, deter-
mining, ordering, certifying, reporting, or otherwise acting as
to any matter, except that—
(A) the Board shall retain a discretionary right to
review any action pursuant to any such delegated function,
upon its own motion;
(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 (including appeal
or review thereof); and
(C) if the right to exercise a review described in
subparagraph (A) is declined, or if no such review is sought
within the time stated in the rules of the Board, then
the action taken by the holder of such delegation shall
for all purposes, including appeal or review thereof, be
deemed to be the action of the Board;
(3) establish ethics rules and standards of conduct for Board
members and staff, including a bar on practice before the
Board (and the Commission, with respect to Board-related mat-
ters) 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 Deadline. submit an annual report (including its audited financ ial statements)
to the Commission, and the Commission shall transmit a copy
of that report to the Committee on Banking, 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.
SEC. 102. REGISTRA TION WITH THE BOARD. 15 USC 7212.
(a) MANDA TORY REGISTRA TION.—Beginning 180 days after the date of the determination of the Commission under section 101(d),
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.
(b) APPLICA TIONS FOR REGISTRA TION.—
(1) FORM OF APPLICA TION.—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 APPLICA TIONS.—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 for which the firm prepared
or issued audit reports during the immediately preceding
calendar year, and for which the firm expects to prepare
or issue audit reports during the current calendar year;
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(B) the annual fees received by the firm from each
such issuer for audit services, other accounting services,
and non-audit services, respectively;
(C) such other current financial information for the
most recently completed fiscal year of the firm as the
Board may reasonably request;
(D) a statement of the quality control policies of the
firm for its accounting and auditing practices;
(E) a list of all accountants associated with the firm
who participate in or contribute to the preparation of audit reports, stating the license or certification number of each
such person, as well as the State license 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 disclosure filed
by an issuer with the Commission during the immediately preceding calendar year which discloses accounting disagreements between such issuer and the firm in connection
with an audit report furnished or prepared by the firm
for such issuer; and
(H) such other information as the rules of the Board
or the Commission shall specify as necessary or appropriate
in the public interest or for the protection of investors.
(3) CONSENTS.—Each application for registration under this subsection shall inc lude—
(A) a consent executed by the public accounting firm
to cooperation in and compliance with any request for testimony or the production of documents made by the
Board in the furtherance of its authority and responsibilities under this title (and an agreement to secure and
enforce similar consents from each of the associated persons
of the public accounting firm as a condition of their continued employment by or other association with such firm);
and
(B) a statement that such firm understands and agrees
that cooperation and compliance, as described in the consent required by subparagraph (A), and the securing and enforcement of such consents from its associated persons,
in accordance with the rules of the Board, shall be a
condition to the continuing effectiveness of the registration
of the firm with the Board.
(c) ACTION ON APPLICA TIONS.—
Deadline. (1) TIMING.—The Board shall approve a completed application 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 information from,
the prospective registrant.
(2) TREA TMENT.—A written notice of disapproval of a completed application under paragraph (1) for registration shall
be treated as a disciplinary sanction for purposes of sections
105(d) and 107(c).
(d) PERIODIC REPORTS.—Each registered public accounting firm shall submit an annual report to the Board, and may be required