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119-s-2382119th CongressWALLET

Trusted Foreign Auditing Act of 2025

Sponsored By: Senator Scott, Rick [R-FL]

Introduced

Summary

Tighten oversight of foreign-influenced auditors. This bill would amend the Sarbanes-Oxley Act to define who counts as a "compromised auditor" and a "covered country," apply a trading prohibition when covered issuers use compromised auditors, and restrict public access to certain Board hearings about those cases.

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  • Investors: Could face trading limits on securities of issuers that retain a compromised auditor and may see fewer public enforcement hearings about those audits.
  • Covered issuers and companies: An issuer headquartered in a covered country that uses a compromised auditor would trigger a trading prohibition and closer audit scrutiny.
  • Foreign accounting firms and affiliates: Branches or subsidiaries subject to a covered country's control or influence could be designated "compromised auditors" based on ownership, control, or ties to that government or ruling party.
  • The Board and enforcement process: Hearings under the amended rules would be closed to the public unless the compromised auditor is a party or the Board finds good cause and the parties agree, narrowing routine public access.

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Bill Overview

Analyzed Economic Effects

3 provisions identified: 0 benefits, 1 costs, 2 mixed.

Limits on public audit oversight hearings

If enacted, the bill would make oversight hearings non-public by default. Hearings would be open only if a compromised auditor retained by a covered issuer is a party, or the Board orders public for good cause and the parties agree. The provision cross-references the bill's definitions of "compromised auditor" and "covered issuer." This would reduce routine public access to PCAOB enforcement details.

New rules for compromised auditors

If enacted, the bill would define who counts as a "compromised auditor." An auditor branch or subsidiary would be "compromised" if it is subject to, controlled by, or materially influenced by a covered foreign country, its officials, or its political party. The bill would also define "covered country" to include nations named in the most recent intelligence threat report and certain defense-law lists. These definitions would be used to decide when other audit rules and restrictions apply.

Trading and inspection limits for issuers

If enacted, the bill would apply an existing trading ban to covered issuers headquartered in a covered country when those issuers use a compromised auditor for the listed audit. The bill would also tie the Board's inability-to-inspect rule specifically to auditors labeled as "compromised auditors." If both conditions apply, trading limits and other statutory consequences could follow. This could restrict market access for some issuers while strengthening enforcement tools for investors.

Sponsors & CoSponsors

Sponsor

Scott, Rick [R-FL]

FL • R

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

No roll call votes available for this bill.

View on Congress.gov
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