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Sarbanes Oxley
Act Section 301
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TITLE
III—CORPORATE RESPONSIBILITY
SEC. 301.
PUBLIC COMPANY AUDIT COMMITTEES.
Section 10A
of the Securities Exchange Act of 1934 (15
U.S.C.
78f) is
amended by adding at the end the following:
‘‘(m) STANDARDS RELATING TO AUDIT COMMITTEES.—
‘‘(1) COMMISSION RULES.—
‘‘(A) IN GENERAL.—Effective
not later than 270 days
after the
date of enactment of this subsection, the
Commission
shall, by
rule, direct the national securities exchanges
and national
securities associations to prohibit the
listing
of any
security of an issuer that is not in
compliance
with the
requirements of any portion of paragraphs (2)
through (6).
‘‘(B) OPPORTUNITY TO
CURE DEFECTS.—The rules of the
Commission
under subparagraph (A) shall provide for
appropriate
procedures for an issuer to have an
opportunity
to cure any
defects that would be the basis for a
prohibition
under
subparagraph (A), before the imposition of
such
prohibition.
‘‘(2) RESPONSIBILITIES RELATING TO REGISTERED
PUBLIC
ACCOUNTING FIRMS.—The
audit committee of each issuer, in
its capacity
as a committee of the board of directors,
shall
be directly
responsible for the appointment, compensation,
and
oversight of
the work of any registered public accounting
firm
employed by
that issuer (including resolution of
disagreements
between
management and the auditor regarding financial
reporting)
for the purpose of preparing or issuing an
audit
report or
related work, and each such registered public
accounting
firm shall report directly to the audit
committee.
‘‘(3) INDEPENDENCE.—
‘‘(A) IN GENERAL.—Each
member of the audit committee
of the issuer
shall be a member of the board of
directors of
the issuer, and shall otherwise be
independent.
‘‘(B) CRITERIA.—In
order to be considered to be independent
for purposes
of this paragraph, a member of an
audit
committee of an issuer may not, other than in
his
or her
capacity as a member of the audit committee,
the
board of
directors, or any other board committee—
‘‘(i) accept
any consulting, advisory, or other
compensatory
fee from the issuer; or
‘‘(ii) be an
affiliated person of the issuer or any
subsidiary
thereof.
‘‘(C) EXEMPTION
AUTHORITY.—The Commission may
exempt from
the requirements of subparagraph (B) a
particular
relationship
with respect to audit committee members,
as the
Commission determines appropriate in light
of the
circumstances.
‘‘(4) COMPLAINTS.—Each
audit committee shall establish
procedures
for—
‘‘(A) the
receipt, retention, and treatment of
complaints
received by
the issuer regarding accounting, internal
accounting
controls, or auditing matters; and
‘‘(B) the
confidential, anonymous submission by
employees of
the issuer of concerns regarding questionable
accounting or
auditing matters.
‘‘(5) AUTHORITY TO
ENGAGE ADVISERS.—Each audit
committee
shall have
the authority to engage independent counsel
and other
advisers, as it determines necessary to carry
out
its duties.
‘‘(6) FUNDING.—Each
issuer shall provide for appropriate
funding, as
determined by the audit committee, in its
capacity
as a
committee of the board of directors, for
payment of
compensation—
‘‘(A) to the
registered public accounting firm employed
by the issuer
for the purpose of rendering or issuing an
audit report;
and
‘‘(B) to any
advisers employed by the audit committee
under
paragraph (5).’’.
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