Fostering Innovation Act of 2019

Bill: 116-hr-3886
Sponsor: full_name: Rep. McAdams, Ben [D-UT-4]
Introduced: 2019-07-23
Policy area: Finance and Financial Sector
Subjects: Accounting and auditing

Administrative law and regulatory procedures

Business investment and capital

Corporate finance and management

Securities

Securities and Exchange Commission (SEC)
Latest action: action_date: 2019-07-23
text: Referred to the House Committee on Financial Services.

Summaries:
action_date: 2019-07-23
action_desc: Introduced in House
text: <p><b>Fostering Innovation Act of 2019</b></p> <p>This bill establishes a temporary exemption&nbsp;from the requirement that each registered public accounting firm that prepares or issues an audit report for an issuer of securities (other than an emerging growth company) shall attest to, and report on, the internal control assessment made by the management of the issuer. Specifically, this requirement shall not apply with respect to an audit report prepared for an issuer that</p> <ul> <li>ceased to be an emerging growth company on the last day of its fiscal year following the five-year period beginning on the date of its first sale of common equity securities, </li> <li>had average annual gross revenues of less than $50 million as of its most recently completed fiscal year, and </li> <li>is not a large accelerated filer. </li></ul> <p>An issuer shall&nbsp;cease to be eligible for the&nbsp;exemption at the earliest of (1) the last day of the fiscal year following the&nbsp;10-year period beginning on the date of its&nbsp;first sale of common equity securities, (2) the last day of the fiscal year in which its average annual gross revenues exceed $50 million, or (3) when the issuer becomes a large accelerated filer. </p>

tv_txt: I 116th CONGRESS 1st Session H. R. 3886 IN THE HOUSE OF REPRESENTATIVES July 23, 2019 Mr. McAdams (for himself and Mr. Hollingsworth ) introduced the following bill; which was referred to the Committee on Financial Services A BILL To amend the Sarbanes-Oxley Act of 2002 to provide a temporary exemption for low-revenue issuers from certain auditor attestation requirements.

1. Short title This Act may be cited as the Fostering Innovation Act of 2019 . 2. Temporary exemption for low-revenue issuers Section 404 of the Sarbanes-Oxley Act of 2002 ( 15 U.S.C. 7262 ) is amended by adding at the end the following: (d) Temporary exemption for low-Revenue issuers (1) Low-revenue exemption Subsection (b) shall not apply with respect to an audit report prepared for an issuer that— (A) ceased to be an emerging growth company on the last day of the fiscal year of the issuer following the fifth anniversary of the date of the first sale of common equity securities of the issuer pursuant to an effective registration statement under the Securities Act of 1933; (B) had average annual gross revenues of less than $50,000,000 as of its most recently completed fiscal year; and (C) is not a large accelerated filer. (2) Expiration of temporary exemption An issuer ceases to be eligible for the exemption described under paragraph (1) at the earliest of— (A) the last day of the fiscal year of the issuer following the tenth anniversary of the date of the first sale of common equity securities of the issuer pursuant to an effective registration statement under the Securities Act of 1933; (B) the last day of the fiscal year of the issuer during which the average annual gross revenues of the issuer exceed $50,000,000; or (C) the date on which the issuer becomes a large accelerated filer. (3) Definitions For purposes of this subsection: (A) Average annual gross revenues The term average annual gross revenues means the total gross revenues of an issuer over its most recently completed three fiscal years divided by three. (B) Emerging growth company The term emerging growth company has the meaning given such term under section 3 of the Securities Exchange Act of 1934 ( 15 U.S.C. 78c ). (C) Large accelerated filer The term large accelerated filer has the meaning given that term under section 240.12b–2 of title 17, Code of Federal Regulations, or any successor thereto. .