Title 15 — Commerce and Trade
Chapter 98 — Public Company Accounting Reform and Corporate Responsibility
§ 7265. Disclosure of audit committee financial expert
Statutory text
Rules defining “financial expert”
The Commission shall issue rules, as necessary or appropriate in the public interest and consistent with the protection of investors, to require each issuer, together with periodic reports required pursuant to sections 78m(a) and 78o(d) of this title, to disclose whether or not, and if not, the reasons therefor, the audit committee of that issuer is comprised of at least 1 member who is a financial expert, as such term is defined by the Commission.
Considerations
In defining the term “financial expert” for purposes of subsection (a), the Commission shall consider whether a person has, through education and experience as a public accountant or auditor or a principal financial officer, comptroller, or principal accounting officer of an issuer, or from a position involving the performance of similar functions—
an understanding of generally accepted accounting principles and financial statements;
experience in—
the preparation or auditing of financial statements of generally comparable issuers; and
the application of such principles in connection with the accounting for estimates, accruals, and reserves;
experience with internal accounting controls; and
an understanding of audit committee functions.
Deadline for rulemaking
The Commission shall—
propose rules to implement this section, not later than 90 days after ; and
issue final rules to implement this section, not later than 180 days after .
Legislative history
Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.
Sarbanes-Oxley Act of 2002
Pub. L. 107–204 title IV § 407 · 116 Stat. 745
Enacted · 15 U.S.C. § 7265
(Pub. L. 107–204, title IV, § 407, July 30, 2002, 116 Stat. 790.)
Source evidence
Code source credit
(Pub. L. 107–204, title IV, § 407, July 30, 2002, 116 Stat. 790.)Enacted provision · exact public law section
SEC. 407. DISCLOSURE OF AUDIT COMMITTEE FINANCIAL EXPERT. (a) Rules Defining “Financial Expert”.— The Commission shall issue rules, as necessary or appropriate in the public interest and consistent with the protection of investors, to require each issuer, together with periodic reports required pursuant to sections 13(a) and 15(d) of the Securities Exchange Act of 1934, to disclose whether or not, and if not, the reasons therefor, the audit committee of that issuer is comprised of at least 1 member who is a financial expert, as such term is defined by the Commission. (b) Considerations.— In defining the term “financial expert” for purposes of subsection (a), the Commission shall consider whether a person has, through education and experience as a public accountant or auditor or a principal financial officer, comptroller, or principal accounting officer of an issuer, or from a position involving the performance of similar functions— (1) an understanding of generally accepted accounting principles and financial statements; (2) experience in— (A) the preparation or auditing of financial statements of generally comparable issuers; and (B) the application of such principles in connection with the accounting for estimates, accruals, and reserves; (3) experience with internal accounting controls; and (4) an understanding of audit committee functions. (c) Deadline for Rulemaking.— The Commission shall— (1) propose rules to implement this section, not later than 90 days after the date of enactment of this Act; and (2) issue final rules to implement this section, not later than 180 days after that date of enactment.
1 of 1 references resolved to an enrolled provision