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S5454119th CongressWALLET

Small Business Audit Correction Act of 2026

Sponsored By: Senator Cotton, Tom [R-AR]

Introduced

Summary

Creates an exemption that would let certain privately held, non-carrying brokers and dealers avoid Sarbanes‑Oxley Title I internal‑control audits. The bill would let those qualifying firms satisfy their annual audit obligation under Rule 17a-5 with an audit conducted under Generally Accepted Auditing Standards and it directs the SEC and PCAOB to update rules to implement the change.

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Bill Overview

Analyzed Economic Effects

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

Audit relief for small broker-dealers

This bill would let some small, privately held broker-dealers be excluded from the Sarbanes-Oxley Title I audit rules. To qualify, a firm would have to be privately held, be a non-carrying broker-dealer (no customer funds or accounts during the most recent fiscal year and no more than 150 persons registered), file the 17a-5(d)(4) exemption report, and be "in good standing" including compliance with the net capital rule and no listed Commission orders or qualifying felony convictions in the prior 10 years. The SEC and the PCAOB would have 180 days after the bill's effective date to amend rules so qualifying firms satisfy the annual 17a-5 audit by a GAAS audit rather than the PCAOB internal-controls audit. The bill would take effect 180 days after enactment and would not let the SEC change auditor independence rules or the exemption-report filing requirement.

Sponsors & CoSponsors

Sponsor

Cotton, Tom [R-AR]

AR • R

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

No roll call votes available for this bill.

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