TITLE II - AUDITOR INDEPENDENCE
SEC. 201. SERVICES OUTSIDE THE SCOPE OF PRACTICE OF AUDITORS.
(a) PROHIBITED ACTIVITIES. - Section 10A of the Securities Exchange Act of
1934 (15 U.S.C. 78j–1) is amended by adding at the end the following:
"(g) PROHIBITED ACTIVITIES. - Except as provided in subsection (h), it
shall be unlawful for a registered public accounting firm (and any associated
person of that firm, to the extent determined appropriate by the Commission)
that performs for any issuer any audit required by this title or the rules of
the Commission under this title or, beginning 180 days after the date of commencement
of the operations of the Public Company Accounting Oversight Board established
under section 101 of the Sarbanes-Oxley Act of 2002 (in this section referred
to as the ‘Board’), the rules of the Board, to provide to that issuer,
contemporaneously with the audit, any non-audit service, including -
"(1) bookkeeping or other services related to the accounting
records or financial statements of the audit client;
"(2) financial information systems design and implementation;
"(3) appraisal or valuation services, fairness opinions,
or contribution-in-kind reports;
"(4) actuarial services;
"(5) internal audit outsourcing services;
"(6) management functions or human resources;
"(7) broker or dealer, investment adviser, or investment
banking services;
"(8) legal services and expert services unrelated to
the audit; and
"(9) any other service that the Board determines, by
regulation, is impermissible.
"(h) PREAPPROVAL REQUIRED FOR NON-AUDIT SERVICES. - A registered public
accounting firm may engage in any non-audit service, including tax services,
that is not described in any of paragraphs (1) through (9) of subsection (g)
for an audit client, only if the activity is approved in advance by the audit
committee of the issuer, in accordance with subsection (i).".
(b) EXEMPTION AUTHORITY. - The Board may, on a case by case basis, exempt any
person, issuer, public accounting firm, or transaction from the prohibition
on the provision of services under section 10A(g) of the Securities Exchange
Act of 1934 (as added by this section), to the extent that such exemption is
necessary or appropriate in the public interest and is consistent with the protection
of investors, and subject to review by the Commission in the same manner as
for rules of the Board under section 107.
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