To establish the Federal Accounting Oversight Board to approve and oversee accounting principles and standards for the purposes of the Federal financial regulatory agencies, and for other purposes.

Summary: Federal Accounting Oversight Board Act of 2009 - Establishes the Federal Accounting Oversight Board (FAOB) to approve and oversee accounting principles and standards for purposes of the federal financial regulatory agencies and the reporting requirements they require.

Directs the FAOB to report annually to Congress, the Financial Accounting Standards Board, and the International Accounting Standards Board on the principles and standards it has reviewed and approved



Amends the Securities Act of 1933 and the Securities Exchange Act of 1934 to transfer standard body oversight authority from the Securities and Exchange Commission (SEC) to the FAOB.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Federal Accounting Oversight Board 
Act of 2009''.

SEC. 2. THE FEDERAL ACCOUNTING OVERSIGHT BOARD.

    (a) Establishment.--There is hereby established the Federal 
Accounting Oversight Board (hereinafter in this Act referred to as the 
``FAOB'').
    (b) Duties.--
            (1) Approval of accounting policy.--The FAOB shall approve 
        and oversee accounting principles and standards for purposes of 
        the Federal financial regulatory agencies and reporting 
        requirements required by such agencies. In approving and 
        overseeing such accounting principles and standards, the FAOB 
        shall consider--
                    (A) the extent to which accounting principles and 
                standards create systemic risk exposure for--
                            (i) the United States public;
                            (ii) the United States financial markets; 
                        and
                            (iii) global financial markets;
                    (B) the extent to which various accounting 
                principles and standards resolve questions concerning 
                liquid and illiquid instruments;
                    (C) whether certain accounting principles and 
                standards should apply to distressed markets 
                differently than well-functioning markets;
                    (D) the balance between investors' need to know a 
                value of a company or financial institution's balance 
                sheet at any given time versus financial regulators' 
                responsibility to examine a company or financial 
                institution's capital and value on both a liquidation 
                and going concern basis;
                    (E) the accuracy and transparency of financial 
                statements;
                    (F) the ability of investors and regulators to 
                accurately judge the current and long term financial 
                condition of companies and financial institutions from 
                their financial statements;
                    (G) the need for accounting principles and 
                standards to take into account the need for financial 
                institutions to maintain adequate reserves to cover 
                expected losses from assets held by such institution;
                    (H) the extent to which accounting principles and 
                standards can improve the usefulness of financial 
                reporting by focusing on the characteristics of 
                relevance and reliability and on the qualities of 
                comparability and consistency;
                    (I) the extent to which such principles and 
                standards can be kept current to reflect changes in 
                methods of doing business and changes in the economic 
                environment; and
                    (J) any other factors that the FAOB considers 
                appropriate.
            (2) Consultation and public comment.--
                    (A) In general.--In carrying out its duties, the 
                FAOB may consult with such organizations or entities as 
                the FAOB believes to be appropriate, including, but not 
                limited to, the Financial Accounting Standards Board, 
                the International Accounting Standards Board, or the 
                Public Company Accounting Oversight Board.
                    (B) Consultation; public comment.--The FAOB shall, 
                before approving a specific accounting principle or 
                standard--
                            (i) solicit input from financial regulators 
                        on the principle or standard, including from 
                        the Comptroller of the Currency, the Director 
                        of the Office of Thrift Supervision, the 
                        Federal Housing Finance Agency, the 
                        Administrator of the National Credit Union 
                        Administration, the President of the National 
                        Association of Insurance Commissioners, and the 
                        Chairman of the Commodities Future Trading 
                        Commission; and
                            (ii) provide the public with an opportunity 
                        to comment on the principle or standard.
                    (C) Safety and soundness considerations.--If any 
                Federal financial regulatory agency determines that any 
                accounting principle or standard approved by the FAOB, 
                or any accounting principle or standard in effect on 
                the effective date of this Act, has an adverse effect 
                on the safety and soundness of the entities it 
                regulates, the health of the United States financial 
                system, or the United States economy, the agency may 
                request authorization from the FAOB to review such 
                accounting principle or standard for the agency, and 
                the FAOB shall determine whether the standard or 
                principle should continue to be applied or instead 
                removed on either a temporary or permanent basis. The 
                FAOB shall have 30 days or such additional time as it 
                may need up to 180 days to review and act on such 
                request. The agency may exercise discretion in ignoring 
                the principle or standard on an emergency or temporary 
                basis for up to 30 days unless otherwise extended by 
                FAOB. The FAOB shall also consider whether any change 
                authorized under this paragraph should be permanently 
                approved by the FAOB as an accounting principle or 
                standard.
            (3) Reports.--The FAOB shall, not less often than yearly, 
        compile a report on the accounting principles and standards 
        that the FAOB has reviewed and approved either temporarily or 
        permanently, and--
                    (A) submit such report to the Congress;
                    (B) submit such report to the Financial Accounting 
                Standards Board;
                    (C) submit such report to the International 
                Accounting Standards Board; and
                    (D) make such report available to the public on a 
                website.
    (c) Membership.--
            (1) In general.--The FAOB shall consist of five members:
                    (A) The Chairman of the Board of Governors of the 
                Federal Reserve System.
                    (B) The Secretary of the Treasury.
                    (C) The Chairman of the Securities and Exchange 
                Commission.
                    (D) The Chairman of the Federal Deposit Insurance 
                Corporation.
                    (E) The Chairman of the Public Company Accounting 
                Oversight Board.
            (2) Chairman.--The Chairman of the Board of Governors of 
        the Federal Reserve System shall serve as the chairman of the 
        FAOB.
    (d) Funding.--
            (1) Annual budget.--The FAOB shall establish a budget for 
        each fiscal year.
            (2) Source of funds.--The budget of the FAOB shall be 
        payable from annual support fees, in accordance with this 
        subsection.
            (3) Annual support fee for the faob.--
                    (A) Establishment of fee.--The FAOB shall establish 
                a reasonable annual support fee (or a formula for the 
                computation thereof), as may be necessary or 
                appropriate to establish and maintain the FAOB. Such 
                fee may also cover costs incurred in the FAOB's first 
                fiscal year (which may be a short fiscal year), or may 
                be levied separately with respect to such short fiscal 
                year.
                    (B) Assessments.--The rules of the FAOB under 
                subparagraph (A) shall provide for the equitable 
                allocation, assessment, and collection by the FAOB (or 
                an agent appointed by the FAOB) of the fee established 
                under subparagraph (A), among registered public 
                accounting firms, allowing for differentiation among 
                classes of firms, as appropriate.
            (4) Limitation on fee.--The amount of fees collected under 
        this subsection for a fiscal year on behalf of the FAOB shall 
        not exceed the recoverable budget expenses of the FAOB (which 
        may include operating, capital, and accrued items), referred to 
        in paragraph (2).
            (5) Fee requirement for registration by the public company 
        accounting oversight board.--Section 102 of the Sarbanes-Oxley 
        Act of 2002 (15 U.S.C. 7212) is amended by adding at the end 
        the following new subsection:
    ``(g) Annual Fee To Support the Federal Accounting Oversight 
Board.--In addition to any other fees required by this title, a 
registered public accounting firm shall pay the annual support fee 
allocated to the registered public accounting firm under section 2(d) 
of the Federal Accounting Oversight Board Act of 2009.''.
            (6) Start-up expenses.--From the unexpended balances of the 
        appropriations to the Security and Exchange Commission for 
        fiscal year 2009, the Secretary of the Treasury is authorized 
        to advance to the FAOB funds not to exceed the amount necessary 
        to cover the expenses of the FAOB during its first fiscal year 
        (which may be a short fiscal year).
    (e) Pay; Travel Expenses.--Members of the FAOB shall not receive 
any additional pay, allowances, or benefits by reason of their service 
on the FAOB, except that each member shall receive travel expenses, 
including per diem in lieu of subsistence, in accordance with 
applicable provisions under subchapter I of chapter 57 of title 5, 
United States Code.
    (f) Meetings.--The FAOB shall meet at the call of the Chairman of 
the FAOB.
    (g) Staff.--
            (1) In general.--The FAOB may appoint and fix the pay of 
        any personnel that the FAOB considers appropriate to carry out 
        its duties under this Act.
            (2) Experts and consultants.--The FAOB may procure 
        temporary and intermittent services under section 3109(b) of 
        title 5, United States Code.
            (3) Staff of agencies.--Upon request of the FAOB, the head 
        of any Federal department or agency may detail, on a 
        reimbursable basis, any of the personnel of that department or 
        agency to the FAOB to assist it in carrying out its duties 
        under this Act.
    (h) Powers.--
            (1) Hearings and sessions.--The FAOB may, for the purpose 
        of carrying out this Act, hold hearings, sit and act at times 
        and places, take testimony, and receive evidence as the FAOB 
        considers appropriate and may administer oaths or affirmations 
        to witnesses appearing before it.
            (2) Powers of members and agents.--Any member or agent of 
        the FAOB may, if authorized by the FAOB, take any action which 
        the FAOB is authorized to take by this Act.
            (3) Obtaining official data.--The FAOB may secure directly 
        from any department or agency of the United States information 
        necessary to enable it to carry out this Act. Upon request of 
        the Chairman of the FAOB, the head of that department or agency 
        shall furnish that information to the FAOB.

SEC. 3. REQUIRING AGENCIES TO CONFORM TO FAOB APPROVED ACCOUNTING 
              PRACTICES AND STANDARDS.

    Notwithstanding any other provision of law, a Federal financial 
regulatory agency shall, not later than 180 days, or within a shorter 
time period as the FAOB may prescribe, after the FAOB approves an 
accounting principle or standard, ensure that all rules and regulations 
made by such agency conform with the approval made by the FAOB.

SEC. 4. TRANSFER OF STANDARD SETTING BODY OVERSIGHT AUTHORITY FROM THE 
              SEC TO THE FAOB.

    (a) Securities Act of 1933.--Section 19(b) of the Securities Act of 
1933 (15 U.S.C. 77s(b)) is amended--
            (1) by striking `` Commission'' each place it appears and 
        inserting ``Federal Accounting Oversight Board'';
            (2) by striking ``subsection (a) and under section 13(b) of 
        the Securities Exchange Act of 1934'' and inserting ``the 
        Federal Accounting Oversight Board Act of 2009''; and
            (3) by striking ``subsection (a) and section 13(b) of the 
        Securities Exchange Act of 1934'' and inserting ``the Federal 
        Accounting Oversight Board Act of 2009''.

SEC. 5. DEFINITIONS.

    For the purposes of this Act:
            (1) Federal financial regulatory agency.--The term 
        ``Federal financial regulatory agency'' means--
                    (A) the Office of Thrift Supervision;
                    (B) the Federal Deposit Insurance Corporation;
                    (C) the National Credit Union Administration;
                    (D) the Securities and Exchange Commission;
                    (E) the Federal Reserve System; and
                    (F) the Office of the Comptroller of the Currency.
            (2) Registered public accounting firm.--The term 
        ``registered public accounting firm'' shall have the same 
        meaning as in section 2(a)(12) of the Sarbanes-Oxley Act of 
        2002 (15 U.S.C. 7201(a)(12)).
            (3) Securities laws defined.--The term ``securities laws'' 
        shall have the same meaning as in section 3(a)(47) of the 
        Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(47)).