§80a–31 Accountants and auditors

Summary

Companies that file financial statements with the Commission must use an independent accountant chosen in a specific way before filing. The accountant must be picked at a meeting held within 30 days before or after the start of the fiscal year or before that year’s annual shareholder meeting, by an in-person vote of a majority of the board members who are not connected to the company. That choice must be put to the next annual shareholder meeting for approval if one is held. If the accountant dies or resigns between meetings, the same kind of board majority can fill the vacancy at a special meeting. The hiring must allow shareholders holding a majority of the outstanding voting securities, at a meeting called for that purpose, to fire the accountant immediately without penalty. The accountant’s report must be sent to both the board and the shareholders. A company may not file a financial statement that the controller or top accounting officer helped prepare unless that person was chosen either by a vote of the holders of the company’s voting securities at the last annual meeting or by the board. The Commission can require accountants and auditors to keep work papers and other records about registered investment companies for the time periods the Commission sets and to let the Commission inspect them.