[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 1767 Introduced in Senate (IS)]
108th CONGRESS
1st Session
S. 1767
To prevent corporate auditors from providing tax shelter services to
their audit clients.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
October 21, 2003
Mr. Levin (for himself, Mr. McCain, and Mr. Baucus) introduced the
following bill; which was read twice and referred to the Committee on
Banking, Housing, and Urban Affairs
_______________________________________________________________________
A BILL
To prevent corporate auditors from providing tax shelter services to
their audit clients.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Auditor Independence and Tax
Shelters Act''.
SEC. 2. PROHIBITION ON AUDITORS PROVIDING TAX SHELTER SERVICES TO AUDIT
CLIENTS.
Section 10A of the Securities Exchange Act of 1934 (15 U.S.C. 78j-
1) is amended--
(1) in subsection (f)--
(A) in the first sentence, by striking ``section,
the term'' and inserting the following: ``section--
``(1) the term'';
(B) by striking ``law. As used in this section, the
term'' and inserting the following: ``law;
``(2) the term''; and
(C) by striking the period at the end and inserting
the following: ``; and
``(3) the term `tax shelter services' means services
provided by a registered public accounting firm (or by an
associated person of that firm) to an issuer, or an officer or
director of an issuer, to design, organize, promote, assist, or
execute any investment, entity, plan, arrangement, or
transaction for which a significant purpose is the avoidance or
evasion of Federal income tax by such issuer, or an officer or
director of such issuer, whether acting as a direct or indirect
participant, and for which such firm may receive fees in excess
of $100,000 in the aggregate.'';
(2) in subsection (g)--
(A) in paragraph (8), by striking ``and'' at the
end;
(B) by redesignating paragraph (9) as paragraph
(10); and
(C) by inserting after paragraph (8) the following:
``(9) tax shelter services; and'';
(3) in subsection (h)--
(A) by inserting ``other than tax shelter
services'' after ``tax services''; and
(B) by striking ``(9)'' and inserting ``(10)''; and
(4) in subsection (i)(1)--
(A) by redesignating subparagraph (B) as
subparagraph (C); and
(B) by inserting after subparagraph (A) the
following:
``(B) Assurance of auditor independence.--Before
preapproving a non-audit service that is not otherwise
prohibited under this section, the audit committee of
an issuer shall--
``(i) determine whether there is a
reasonable likelihood that provision of the
non-audit service would impair the independence
of the registered public accounting firm by
resulting in the firm--
``(I) auditing its own work for the
issuer;
``(II) performing a management
function for the issuer;
``(III) advocating in a public
forum for the issuer; or
``(IV) promoting the stock or other
financial interest of the issuer; and
``(ii) if the audit committee determines
that such a reasonable likelihood exists, the
audit committee shall not provide advance
approval of such service under this section.''.
SEC. 3. EFFECTIVE DATE.
This Act, and the amendments made by this Act, shall take effect on
the date of enactment of this Act, and shall apply to any tax shelter
service, as defined in section 10A of the Securities Exchange Act of
1934, as amended by this Act, that is submitted for preapproval to the
audit committee of an issuer or is provided by a registered public
accounting firm to an issuer in accordance with that section 10A on or
after the date of enactment of this Act.
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