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SEC. 407.
DISCLOSURE OF AUDIT COMMITTEE FINANCIAL
EXPERT.
(a) RULES DEFINING
‘‘FINANCIAL EXPERT’’.—The
Commission
shall issue
rules, as necessary or appropriate in the
public interest
and
consistent with the protection of investors,
to require each
issuer,
together with periodic reports required
pursuant to sections
13(a) and
15(d) of the Securities Exchange Act of 1934,
to disclose
whether or
not, and if not, the reasons therefor, the
audit committee
of that
issuer is comprised of at least 1 member who
is a financial
expert, as
such term is defined by the Commission.
(b) CONSIDERATIONS.—In
defining the term ‘‘financial expert’’
for purposes
of subsection (a), the Commission shall
consider
whether a
person has, through education and experience
as a public
accountant or
auditor or a principal financial officer,
comptroller,
or principal
accounting officer of an issuer, or from a
position
involving the
performance of similar functions—
(1) an
understanding of generally accepted accounting
principles
and financial
statements;
(2)
experience in—
(A) the
preparation or auditing of financial
statements
of generally
comparable issuers; and
(B) the
application of such principles in connection
with the
accounting for estimates, accruals, and
reserves;
(3)
experience with internal accounting controls;
and
(4) an
understanding of audit committee functions.
(c) DEADLINE FOR
RULEMAKING.—The Commission shall—
(1) propose
rules to implement this section, not later
than
90 days after
the date of enactment of this Act; and
(2) issue
final rules to implement this section, not
later
than 180 days
after that date of enactment.
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