Trusted Foreign Auditing Act of 2025
Sponsored By: Representative Stefanik, Elise M. [R-NY-21]
Introduced
Summary
Strengthens oversight of auditors tied to foreign governments by creating a new "compromised auditor" label and expanding when trading and public hearings are restricted for issuers linked to risky countries. This focuses regulators on auditors or audit offices that are controlled by or subject to influence from countries identified as national security threats.
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- Companies and investors: Covered issuers headquartered in a "covered country" face a trading prohibition if they retain a compromised auditor, which can limit market activity for those issuers.
- Auditors and accounting firms: "Compromised auditor" now covers registered firms, branches, or subsidiaries that are under the jurisdiction, control, or material influence of a covered country or that have arrangements with that government or its party that could impair independence.
- Transparency and enforcement: Hearings under the law are closed to the public unless a compromised auditor is a party or the Accounting Board orders a public hearing for good cause with the parties' consent.
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Bill Overview
Analyzed Economic Effects
2 provisions identified: 0 benefits, 1 costs, 1 mixed.
Trading bans and fewer public hearings
This bill would trigger a trading ban if two things are true: a covered issuer is headquartered in a country of concern, and it hires a compromised auditor to prepare a listed audit report. If both apply, buying or selling that company’s securities could be barred under the rule. The bill would also make most audit board hearings private. A hearing would be public only if a compromised auditor retained by a covered issuer is a party, or if the Board orders it for good cause and all parties agree.
New rules for foreign-linked auditors
This bill would define a “compromised auditor.” It would cover an audit firm branch or subsidiary under the control or influence of a “covered country,” or with ties that could weaken audit independence. A “covered country” would include places named as national security threats in the most recent intelligence report to Congress and certain nations listed in federal law. It would also tie an inspection rule to this new definition. That could change when the audit overseer could inspect or act against an auditor.
Sponsors & CoSponsors
Sponsor
Stefanik, Elise M. [R-NY-21]
NY • R
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov