S. 3494: Trusted Foreign Auditing Act of 2023

This bill expands a securities trading prohibition currently applicable to companies that use a foreign public accounting firm not subject to inspections by the Public Company Accounting Oversight Board.

Under the bill, a company’s securities are prohibited from trade on a national securities exchange or through any other method regulated by the Securities and Exchange Commission if a company that is headquartered in a country of concern retains a compromised auditor to prepare an audit report. The bill defines a country of concern as North Korea, China, Russia, Iran, or a country identified as a threat to U.S. security in an annual report by the Office of the Director of National Intelligence. The bill defines a compromised auditor as an independent branch or office of a registered public accounting firm that is subject to the jurisdiction and laws of a country of concern, is controlled or influenced by a country of concern, or has entered into a particular type of relationship with a country of concern.

Further, board hearings to investigate and discipline registered public accounting firms must be public if a compromised auditor is a party to the hearing.

Written by the Congressional Research Service, Library of Congress.