PlainBillCongress, translated.Legislation. Context. Public interest.Congressional Research Service
Version 17 · Reported to House with amendment(s) · Apr 22, 2002
Corporate and Auditing Accountability, Responsibility, and Transparency Act of 2002 - States that the Securities and Exchange Commission (SEC) shall not accept a financial statement certified by an accountant unless such accountant is subject to oversight by a public regulatory organization (PRO), and is in good standing with it.(Sec. 2) Directs the SEC to prescribe the criteria that would permit recognition of a PRO for purposes of this Act, including: (1) a five member board composed of three non-accountants and two accountants; (2) the capacity to review work product and potential conflicts of interest; (3) the authority to impose sanctions for intentional or knowing misconduct, including a determination that an accountant is not qualified to certify a financial statement or certain categories of financial statement; and (4) procedures for notifying the relevant organizations or persons of review procedures and results and any other relevant information.Requires such organization to be self-funded and not solely dependent on members of the accounting profession. Requires the SEC to comply with the PRO's requests to compel testimony or production of records unless it determines that to do so would not be in the public interest.Directs the SEC to revise auditor independence regulations so as to exclude financial information system design or implementation or internal audit services from activities permissible for an independent auditor. Requires the periodic review of services by auditors to determine if any affect their independence and should therefore be added to the prohibited nonaudit services list. Directs the SEC to report to the appropriate congressional committees on its conduct of any reviews, including recommended regulatory or legislative steps.Prescribes procedural guidelines for: (1) prompt notification of PRO sanctions to the SEC; (2) SEC review of such sanctions, including nondisclosure of any accountant review proceedings except as otherwise authorized; (3) review, approval, revision, or abrogation of a PRO's rules or proposed rule changes by the SEC; and (4) a PRO's annual report and budget submission to the SEC and, subsequently, to Congress.(Sec. 3) Prohibits an officer, director, or affiliated persons of an issuer of a registered security from exerting improper influence upon the conduct of audits.(Sec. 4) Mandates, upon SEC request, rapid disclosure of an issuer's financial condition or operations, including electronic disclosure of insider and affiliate transactions.(Sec. 5) Prohibits a ten percent beneficial owner from engaging in insider trades during pension fund blackout periods. Requires disgorgement of profits realized in violation of this prohibition. Exempts certain such owners from this proscription. Bars a lawsuit for violation of such insider trades two years after the date the insider trade profit was realized.(Sec. 6) Directs the SEC to modify regulations governing corporate disclosures, requiring adequate and appropriate disclosure of off-balance sheet transactions and relationships with unconsolidated entities or other persons. Requires an analysis of the need for disclosure of additional information to improve transparency, completeness, or usefulness, including identifying key accounting principles, the trading of non-exchange traded contracts, and format.(Sec. 7) Directs the SEC to propose rule changes to improve the transparency and clarity of the financial reporting information available to investors as it concerns the issuer, its officers, directors, employees and/or affiliates, including insider relationships and transactions, relationships with philanthropic organizations, insider-controlled affiliates, joint ownerships, and the provision of professional services by related persons.(Sec. 8) Requires the New York Stock Exchange, the American Stock Exchange, and the NASDAQ Stock Market to file with the SEC proposed rule changes prohibiting the listing of any security whose issuer has not adopted a senior financial officers code of ethics. Authorizes the SEC to require the same rule changes for other national securities exchanges. Requires the SEC to revise regulations to require immediate disclosure by an issuer of any change in or waiver of their code of ethics.(Sec. 9) Requires the SEC to review issuers' disclosures on a more regular and systematic basis, based on a confidential SEC-established risk rating system, but in no event less than once every three years.(Sec. 10) Requires the retention of records for no less than seven years after an audit.(Sec. 11) Permits the SEC to prohibit any person who committed fraud or deception in the purchase or sale of securities in violation of the Securities Act of 1933 and the Securities Exchange Act of 1934 from serving as an officer or director of a public company if such person's conduct demonstrates substantial unfitness to serve in such capacity. Requires the SEC to consider a person's degree of scienter, economic gain, the severity of the conduct, and its likelihood of recurrence when determining substantial unfitness.(Sec. 12) Requires the SEC to analyze when an officer or director of an issuer must disgorge profits gained or losses avoided in the sale of securities of such issuer during the six-month period preceding the filing of a restated financial statement. Requires the SEC to prescribe a rule requiring disgorgement if necessary to the public interest or for the protection of investors.(Sec. 13) Provides for the disgorgement and allocation of funds resulting from SEC administrative or judicial proceedings brought against Enron, Arthur Anderson L.L.C., and any of their subsidiaries, officers, directors, or principal shareholders.(Sec. 14) Directs the SEC to review and report to the appropriate congressional committees on any final rules by any registered self-regulatory organization related to equity research analyst conflicts of interest, including any recommendations for additional rulemaking.(Sec. 15) Directs the SEC to review, report, and make recommendations on: (1) current corporate governance practices and whether they serve the best interests of the shareholders; (2) SEC enforcement actions, focusing on areas of reporting that are most susceptible to fraud, manipulation, or inappropriate earnings management; and (3) credit rating agencies in the operations of the securities market, including their role in evaluating securities issuers and any impediments, barriers, or conflicts of interests.(Sec. 18) Directs the Comptroller General to study and report to Congress on: (1) the role played by investment banks and financial advisors in assisting public companies in manipulating their earnings and obfuscating their true financial condition through transactions which may have been designed solely to enable them to manipulate revenue streams, obtain loans, or move liabilities off balance sheets without altering the economic and business risks they faced, with particular attention to the collapse of Enron and the failure of Global Crossing; and (2) Model Rules of Professional Conduct for attorneys of issuers promulgated by the American Bar Association and related SEC rules, and whether current ethical guidelines are sufficient to guide such attorneys and protect corporate shareholders.(Sec. 20) Extends existing SEC enforcement authority to the provisions of this Act.(Sec. 21) Excludes specified investment companies registered under the Investment Company Act of 1940 from certain financial disclosure and corporate governance review requirements of this Act.
People & committees
Rep. Oxley, Michael G. [R-OH-4] · R–OH
Legislative record
A procedural vote is different from passage. Passage in one chamber does not establish enactment. Explore the glossary.
Became Public Law No: 107-204.
Became Public Law No: 107-204.
Signed by President.
Signed by President.
Presented to President.
Presented to President.
Message on Senate action sent to the House.
Senate agreed to conference report by Yea-Nay Vote. 99 - 0. Record Vote Number: 192.
Senate roll call 192 · Individual votesConference report agreed to in Senate: Senate agreed to conference report by Yea-Nay Vote. 99 - 0. Record Vote Number: 192.
Senate roll call 192 · Individual votesConference report considered in Senate by Unanimous Consent. (consideration: CR S7350-7365)
On agreeing to the conference report Agreed to by the Yeas and Nays: 423 - 3 (Roll no. 348). (consideration: CR H5462-5480)
House roll call 348 · Individual votesMotions to reconsider laid on the table Agreed to without objection.
Conference report agreed to in House: On agreeing to the conference report Agreed to by the Yeas and Nays: 423 - 3 (Roll no. 348).(consideration: CR H5462-5480)
House roll call 348 · Individual votesThe previous question was ordered without objection.
Conference papers: official papers held at the desk in Senate.
DEBATE - The House proceeded with one hour of debate on the conference report. Pursuant to the order of the House on July 24, 2002, that it be in order at any time on Thursday, July 25, 2002, to consider a conference report to accompany H.R. 3763; that the conference report be considered as read; and that all points of order against the conference report and against its consideration be waived.
Mr. Oxley brought up conference report H. Rept. 107-610 by previously agreed to special order.
Conference report H. Rept. 107-610 filed.
Conference report filed: Conference report H. Rept. 107-610 filed.
Conferees agreed to file conference report. (text of conference report: CR H5393-5411; scroll down in Record document)
Conference committee actions: Conferees agreed to file conference report.(text of conference report: CR H5393-5411; scroll down in Record document)
Conference held.
Conference committee actions: Conference held.
The Speaker appointed conferees - from the Committee on Ways and Means for consideration of sec. 109 of the Senate amendment, and modifications committed to conference: Thomas, McCrery, and Rangel.
The Speaker appointed conferees - from the Committee on the Judiciary for consideration of sec. 105 and titles 8 and 9 of the Senate amendment, and modifications committed to conference: Sensenbrenner, Smith (TX), and Conyers.
The Speaker appointed conferees - from the Committee on Energy and Commerce for consideration of secs. 108 and 109 of the Senate amendment, and modifications committed to conference: Tauzin, Greenwood, and Dingell.
The Speaker appointed conferees - from the Committee on Education and the Workforce for consideration of secs. 306 and 904 of the Senate amendment, and modifications committed to conference: Boehner, Johnson, Sam, and Miller, George.
The Speaker appointed conferees Provided that Mr. Shows is appointed in lieu of Ms. Waters for consideration of sec. 11 of the House bill and sec. 305 of the Senate amendment, and modifications committed to conference.
The Speaker appointed conferees - from the Committee on Financial Services for consideration of the House bill and the Senate amendments, and modifications committed to conference: Oxley, Baker, Royce, Ney, Kelly, Cox, LaFalce, Frank, Kanjorski, and Waters.
On motion that the House instruct conferees Failed by the Yeas and Nays: 207 - 218 (Roll no. 313).
House roll call 313 · Individual votesThe previous question was ordered without objection.
DEBATE - The House proceeded with one hour of debate on the Conyers motion to instruct conferees. The instructions contained in the motion seek to require the managers on the part of the House to recede from disagreement with the provisions contained in the proposed section 1520 of Chapter 73 of Title 18 of the United States Code added by section 802, and the provisions contained in sections 804, 805 and 806 of the engrossed Senate amendment.
Mr. Conyers moved that the House instruct conferees.
On motion that the House disagree to the Senate amendment, and agree to a conference Agreed to without objection. (consideration: CR H4838-4847)
Mr. Oxley asked unanimous consent that the House disagree to the Senate amendment, and agree to a conference.
Message on Senate action sent to the House.
Senate appointed conferee(s) Sarbanes; Dodd; Johnson; Reed; Leahy; Gramm; Shelby; Bennett; Enzi under the authority of the order of the Senate of July 15, 2002.
Senate insisted on its amendment, requested a conference.
Passed Senate with an amendment by Voice Vote. (text: CR S6779-6793)
Passed/agreed to in Senate: Passed Senate with an amendment by Voice Vote.(text: CR S6779-6793)
Senate struck all after the Enacting Clause and substituted the language of S.2673 amended.
Measure laid before Senate by unanimous consent. (consideration: CR S6779-6793)
Senate Committee on Banking, Housing, and Urban Affairs discharged by Unanimous Consent.
Senate Committee on Banking, Housing, and Urban Affairs discharged by Unanimous Consent.
Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
The Clerk was authorized to correct section numbers, punctuation, and cross references, and to make other necessary technical and conforming corrections in the engrossment of H.R. 3763.
Motion to reconsider laid on the table Agreed to without objection.
On passage Passed by recorded vote: 334 - 90 (Roll no. 110).
House roll call 110 · Individual votesPassed/agreed to in House: On passage Passed by recorded vote: 334 - 90 (Roll no. 110).
House roll call 110 · Individual votesOn motion to recommit with instructions Failed by recorded vote: 205 - 222 (Roll no. 109). (text: CR H1589-1590)
House roll call 109 · Individual votesThe previous question on the motion to recommit with instructions was ordered without objection.
Floor summary: DEBATE - The House proceeded with 10 minutes of debate on the LaFalce motion to recommit with instructions.
Mr. LaFalce moved to recommit with instructions to Financial Services.
The previous question was ordered pursuant to the rule.
The House rose from the Committee of the Whole House on the state of the Union to report H.R. 3763.
DEBATE - Pursuant to the provisions of H. Res. 395, the Committee of the Whole proceeded with 40 minutes of debate on the LaFalce amendment.
DEBATE - Pursuant to the provisions of H. Res. 395, the Committee of the Whole proceeded with 20 minutes of debate on the Kucinich amendment.
DEBATE - Pursuant to the provisions of H. Res. 395, the Committee of the Whole proceeded with 20 minutes of debate on the Sherman amendment.
DEBATE - Pursuant to the provisions of H. Res. 395, the Committee of the Whole proceeded with 20 minutes of debate on the Capuano amendment.
DEBATE - Pursuant to the provisions of H. Res. 395, the Committee of the Whole proceeded with 10 minutes of debate on the Oxley amendment.
GENERAL DEBATE - The Committee of the Whole proceeded with one hour of general debate on H.R. 3763.
The Speaker designated the Honorable John E. Sweeney to act as Chairman of the Committee.
House resolved itself into the Committee of the Whole House on the state of the Union pursuant to H. Res. 395 and Rule XXIII.
Rule provides for consideration of H.R. 3763 with 1 hour of general debate. Previous question shall be considered as ordered without intervening motions except motion to recommit with or without instructions. It shall be in order to consider as an original bill for the purpose of amendment under the five-minute rule the amendment in the nature of a substitute recommended by the Committee on Financial Services now printed in the bill. Measure will be considered read. Specified amendments are in order.
Considered under the provisions of rule H. Res. 395. (consideration: CR H1544-1592; text of measure as reported in House: CR H1557-1563)
Rule H. Res. 395 passed House.
Rules Committee Resolution H. Res. 395 Reported to House. Rule provides for consideration of H.R. 3763 with 1 hour of general debate. Previous question shall be considered as ordered without intervening motions except motion to recommit with or without instructions. It shall be in order to consider as an original bill for the purpose of amendment under the five-minute rule the amendment in the nature of a substitute recommended by the Committee on Financial Services now printed in the bill. Measure will be considered read. Specified amendments are in order.
Placed on the Union Calendar, Calendar No. 247.
Reported (Amended) by the Committee on Financial Services. H. Rept. 107-414.
Reported (Amended) by the Committee on Financial Services. H. Rept. 107-414.
Ordered to be Reported (Amended) by the Yeas and Nays: 49 - 12.
Committee Consideration and Mark-up Session Held.
Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises Discharged.
Committee Consideration and Mark-up Session Held.
Committee Hearings Held.
Committee Hearings Held.
Committee Hearings Held.
Referred to the Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises.
Referred to the House Committee on Financial Services.
Introduced in House
Introduced in House
Primary sources
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Source last updated: Apr 7, 2025. Consult Congress.gov for the current record.
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