S 452 — Fostering Innovation Act of 2019

Summary

Fostering Innovation Act of 2019 This bill establishes a temporary exemption 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 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, had average annual gross revenues of less than $50 million as of its most recently completed fiscal year, and is not a large accelerated filer. An issuer shall cease to be eligible for the exemption at the earliest of (1) the last day of the fiscal year following the 10-year period beginning on the date of its 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.

Bill Text

• Introduced Introduced in Senate Current html February 12, 2019

Compared against current U.S. Code AI-generated reading aid — verify against the official bill.

The bill introduces a temporary exemption from certain auditor attestation requirements for low-revenue issuers under the Sarbanes-Oxley Act.

• 15 U.S.C. 7262

  (d) Temporary Exemption for Low-Revenue Issuers.-- (1) Definitions.--In this subsection-- (A) the term `average annual gross revenues' means the total gross revenues of an issuer over its most recently completed 3 fiscal years divided by 3; (B) the term `emerging growth company' has the meaning given the term in section 3 of the Securities Exchange Act of 1934 (15 U.S.C. 78c); and (C) the term `large accelerated filer' has the meaning given the term in section 240.12b-2 of title 17, Code of Federal Regulations (or any successor regulation). (2) 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 5-year period beginning on 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 (15 U.S.C. 77a et seq.); (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. (3) Expiration of temporary exemption.--An issuer ceases to be eligible for the exemption described under paragraph (1) on the earlier of-- (A) the last day of the fiscal year of the issuer following the 10-year period beginning on 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 (15 U.S.C. 77a et seq.); (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.

  This new subsection adds specific criteria for a temporary exemption from auditor attestation for low-revenue issuers.

Action History

1. February 12, 2019

   Introduced in Senate

2. February 12, 2019

   Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.

Sponsors

• Gary C. Peters · Cosponsor
• David Perdue · Cosponsor
• Kyrsten Sinema · Cosponsor
• Thomas Tillis · Primary

Subjects