Section 201 of the Sarbanes-Oxley Act – Prohibited Auditor Activities

Section 201 of the Sarbanes-Oxley Act

Prohibited Auditor Activities

Following is an excerpt from the Sarbanes-Oxley Act of 2002.

To read the rest of Title II –Auditor Independence, click
here.

SEC. 201. SERVICES OUTSIDE THE SCOPE OF PRACTICE OF AUDITORS.

(a) PROHIBITED ACTIVITIES- Section 10A of the

Securities Exchange Act of 1934 (15 U.S.C. 78j-1) is

amended by adding at the end the following:

(g)

PROHIBITED ACTIVITIES- Except as provided in subsection (h), it shall be

unlawful for a registered public accounting firm (and any associated person of

that firm, to the extent determined appropriate by the Commission) that

performs for any issuer any audit required by this title or the rules of the

Commission under this title or, beginning 180 days after the date of

commencement of the operations of the Public Company Accounting Oversight Board

established under section 101 of the Sarbanes-Oxley Act of 2002 (in this

section referred to as the `Board’), the rules of the Board, to provide to that

issuer, contemporaneously with the audit, any non-audit service, including–

(1)

bookkeeping or other services related to the accounting records or financial statements

of the audit client;

(2) financial information systems design and implementation;

(3) appraisal or valuation services, fairness opinions, or contribution-in-kind

reports;

(4) actuarial services;

(5) internal audit outsourcing services;

(6) management functions or human resources;

(7) broker or dealer, investment adviser, or investment banking services;

(8) legal services and expert services unrelated to the audit; and

(9) any other service that the Board determines, by regulation, is impermissible.

(h)

PREAPPROVAL REQUIRED FOR NON-AUDIT SERVICES- A registered public accounting

firm may engage in any non-audit service, including tax services, that is not

described in any of paragraphs (1) through (9) of subsection (g) for an audit

client, only if the activity is approved in advance by the audit committee of

the issuer, in accordance with subsection (i).’.

(b) EXEMPTION AUTHORITY- The

Board may, on a case by case basis, exempt any person, issuer, public

accounting firm, or transaction from the prohibition on the provision of

services under section 10A(g) of the Securities Exchange Act of 1934 (as added

by this section), to the extent that such exemption is necessary or appropriate

in the public interest and is consistent with the protection of investors, and

subject to review by the Commission in the same manner as for rules of the

Board under section 107.