SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Amend Misinterpreted Excessive 
Regulation In Corporate America Act''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) The stated intent of the Sarbanes-Oxley Act of 2002 was 
        to restore confidence and integrity in our nation's financial 
        markets through increased transparency and accountability.
            (2) The regulatory interpretation of section 404 of that 
        Act has led to many unintended consequences, such as--
                    (A) diverting valuable resources away from other 
                legitimate business needs;
                    (B) creating massive and tedious documentation 
                requirements; and
                    (C) discouraging the public listing of both 
                international and domestic companies on United States 
                markets.
            (3) Nine out of ten complaints about the Sarbanes-Oxley Act 
        of 2002 are related to section 404.
            (4) Ninety percent of international small companies have 
        listed in international markets and not in the United States 
        markets.
            (5) The out-of-pocket costs have been $4 million to $6 
        million per accelerated filer, more than 50 times original 
        Securities and Exchange Commission estimates.
            (6) Total economic costs including opportunity costs and 
        social implications are up to $1.4 trillion.

SEC. 3. CREATION OF OMBUDSMAN FOR THE PCAOB.

    Title I of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7211 et seq.) 
is amended by adding at the end the following new section:

``SEC. 110. OMBUDSMAN.

    ``(a) Establishment Required.--Not later than 180 days after the 
date of enactment of the Amend Misinterpreted Excessive Regulation In 
Corporate America Act, the Board shall appoint an ombudsman for the 
Board. The Ombudsman shall report directly to the Chairman.
    ``(b) Duties of Ombudsman.--The ombudsman appointed in accordance 
with subsection (a) for the Board shall--
            ``(1) act as a liaison between the Board and--
                    ``(A) any registered public accounting firm or 
                issuer with respect to issues or disputes concerning 
                the preparation or issuance of any audit report with 
                respect to that issuer; and
                    ``(B) any affected registered public accounting 
                firm or issuer with respect to--
                            ``(i) any problem such firm or issuer may 
                        have in dealing with the Board resulting from 
                        the regulatory activities of the Board, 
                        particularly with regard to the implementation 
                        of section 404; and
                            ``(ii) issues caused by the relationships 
                        of registered public accounting firms and 
                        issuers generally; and
            ``(2) assure that safeguards exist to encourage 
        complainants to come forward and to preserve confidentiality; 
        and
            ``(3) carry out such activities, and any other activities 
        assigned by the Board, in accordance with guidelines prescribed 
        by the Board.''.

SEC. 4. REORGANIZATION OF THE BOARD OF THE PCAOB.

    (a) Appointment to the Board.--
            (1) Amendment.--Subparagraph (A) of section 101(e)(4) of 
        the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7211(e)(4)(B)) is 
        amended to read as follows:
                    ``(A) Presidential appointment.--The members of the 
                Board shall be appointed by the President, by and with 
                the advice and consent of the Senate.''.
            (2) Transition.--The members of the Public Company 
        Accounting Oversight Board serving on the date of enactment of 
        this Act may continue to serve until a successor is appointed 
        pursuant to the amendment made by paragraph (1) of this 
        subsection. The term of office of any such successor shall 
        expire at the time of the expiration of the term of his or her 
        predecessor, as designated by the President at the time of the 
        appointment.
            (3) Compensation.--Section 5312 of title 5, United States 
        Code, is amended by adding at the end the following:
        ``Chairman and Members, Public Company Accounting Oversight 
        Board.''.
            (4) Conforming amendments.--
                    (A) Sections 101(e) of the Sarbanes-Oxley Act of 
                2002 (15 U.S.C. 7211(e)) is amended by striking 
                paragraph (6).
                    (B) Section 107(d) of such Act (15 U.S.C. 7217(d)) 
                is amended by striking paragraph (3).
    (b) Funding.--Section 109(f) of such Act is amended by adding at 
the end the following new sentence: ``The Congress reserves the 
authority to establish annual or other periodic limits upon the amount 
of fees which may be collected under this section on behalf of the 
Board.''.

SEC. 5. REDUCTIONS OF INTERNAL CONTROL IMPLEMENTATION COSTS.

    (a) Revisions Required.--Not later than December 31, 2007--
            (1) the Securities and Exchange Commission shall adopt 
        revisions to its rules under section 404(a) of the Sarbanes-
        Oxley Act of 2002 (15 U.S.C. 7211(a)) relating to management's 
        assessment of an issuer's internal control structure and 
        procedures; and
            (2) the Public Company Accounting Oversight Board shall 
        adopt revisions to its standards under section 404(b) of such 
        Act for auditor attestation to and reporting on such management 
        assessment.
    (b) Cost of Implementation Reduction.--In adopting the revisions 
required by subsection (a), the Commission and the Board shall reduce 
the costs of the implementation of section 404, consistent with the 
intention of the Congress that such section not increase significantly 
the cost of the annual audits of financial statements under section 
13(a) and 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 
78m(a), 78o(d)).
    (c) Risk-Based Implementation.--In adopting the revisions required 
by subsection (a), the Commission shall adopt a more risk-based 
statement on internal control reporting that focuses internal control 
review on financial controls having significant risk of failing to 
prevent financial damages that would be material to the financial 
statements of the issuer.

SEC. 6. SEPARATE ENGAGEMENTS FOR INTERNAL CONTROL EVALUATIONS.

    Section 404(b) of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 
7262(b)) is amended--
            (1) by inserting before the period at the end of the first 
        sentence the following: ``, or the issuer shall separately 
        engage a different registered public accounting firm which 
        shall attest to and report on such assessment''; and
            (2) by striking the last sentence.

SEC. 7. PRIVATE RIGHTS OF ACTION.

    Section 404 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7262) is 
amended by adding at the end the following new subsection:
    ``(c) No Private Rights of Action.--No private right of action may 
be brought against any registered public accounting firm in any Federal 
or State court on the basis of a violation or alleged violation of the 
requirements of this section or standards issued by the Board under or 
for purposes of implementing this section.''.
Output: Amend Misinterpreted Excessive Regulation In Corporate America Act - Amends the Sarbanes-Oxley Act of 2002 to direct the Public Company Accounting Oversight Board to appoint an ombudsman to act as a liaison between the Board and any registered public accounting firm or issuer regarding: (1) issues or disputes concerning the preparation or issuance of any audit report with respect to that issuer; and (2) problems resulting from Board regulatory activities, particularly implementation of management assessment of internal controls.

Revises requirements governing appointment of Board members. Provides for Presidential appointment of Board members, by and with the advice and consent of the Senate.

Declares that Congress reserves the authority to establish periodic limits upon the amount of fees which may be collected on behalf of the Board.

Instructs the Securities and Exchange Commission to: (1) adopt revisions to its rules regarding management's assessment of an issuer's internal control structure and procedures; and (2) adopt a more risk-based statement on internal control reporting that focuses internal control review on financial controls having significant risk of failing to prevent financial damages that would be material to the issuer's financial statements.

 Instructs the Board to revise its standards for auditor attestation to and reporting on management's internal control assessment.

Revises the requirement that each registered public accounting firm that prepares or issues the audit report for an issuer attest to the internal control assessment made by the issuer's management. Allows an issuer, in the alternative, to engage separately a different registered public accounting firm to attest to such assessment. (Current law prohibits such separate attestation engagements.)

Prohibits any private right of action against a registered public accounting firm in any federal or state court on the basis of a violation or alleged violation of assessment requirements or standards issued by the Board for purposes of implementing the Sarbanes-Oxley Act of 2002.