Section 407 -- Disclosure of Audit Committee Financial Expert
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.
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;
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;
an understanding of audit committee functions.
Deadline for Rulemaking. The Commission
propose rules to implement this section,
not later than 90 days after the date of enactment of this Act; and
issue final rules to implement this section,
not later than 180 days after that date of enactment.
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