13 Sec. 103 SARBANES-OXLEY ACT OF 2002 (iii) in each audit report for an issuer, describe the
scope of the auditor’s testing of the internal control
structure and procedures of the issuer, required by
section 404(b), and present (in such report or in a sep-
arate report)—
(I) the findings of the auditor from such test-
ing;
(II) an evaluation of whether such internal
control structure and procedures—
(aa) include maintenance of records that
in reasonable detail accurately and fairly re-
flect the transactions and dispositions of the
assets of the issuer;
(bb) provide reasonable assurance that
transactions are recorded as necessary to per-
mit preparation of financial statements in ac-
cordance with generally accepted accounting
principles, and that receipts and expenditures
of the issuer are being made only in accord-
ance with authorizations of management and
directors of the issuer; and
(III) a description, at a minimum, of material
weaknesses in such internal controls, and of any
material noncompliance found on the basis of such
testing.
(B) shall include, in the quality control standards that
it adopts with respect to the issuance of audit reports, re-
quirements for every registered public accounting firm re-
lating to—
(i) monitoring of professional ethics and independ-
ence from issuers, brokers, and dealers on behalf of
which the firm issues audit reports;
(ii) consultation within such firm on accounting
and auditing questions;
(iii) supervision of audit work;
(iv) hiring, professional development, and ad-
vancement of personnel;
(v) the acceptance and continuation of engage-
ments;
(vi) internal inspection; and
(vii) such other requirements as the Board may
prescribe, subject to subsection (a)(1).
(3) A
UTHORITY TO ADOPT OTHER STANDARDS
.—
(A) I
N GENERAL
.—In carrying out this subsection, the
Board—
(i) may adopt as its rules, subject to the terms of
section 107, any portion of any statement of auditing
standards or other professional standards that the
Board determines satisfy the requirements of para-
graph (1), and that were proposed by 1 or more profes-
sional groups of accountants that shall be designated
or recognized by the Board, by rule, for such purpose,
pursuant to this paragraph or 1 or more advisory
groups convened pursuant to paragraph (4); and
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As Amended Through P.L. 116-222, Enacted December 18, 2020