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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