Sec. 401. Plan audit quality improvement
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Section 103(a)(3) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1023(a)(3) ) is amended— in subparagraph (A), by striking in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year. Such examination shall be conducted in accordance with generally accepted auditing standards, and shall involve such tests of the books and records of the plan as are considered necessary by the independent qualified public accountant. and inserting in conformity with generally accepted accounting principles, as superseded or modified by the Secretary in regulations, applied on a basis consistent with that of the preceding year.
Such examination shall be conducted in accordance with generally accepted auditing standards, except as superseded or modified by the Secretary in regulations, and shall involve such tests of the books and records of the plan as are considered necessary by the independent qualified public accountant. ; and by adding at the end the following: Persons described in subparagraphs
(i)through
(iii)of subparagraph
(D)shall be subject to such additional standards regarding conflicts of interest, qualifications, and direct reporting of certain events such as fraud and other irregularities as the Secretary may prescribe in regulations. . Section 502(c)(2) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1132(c)(2) ) is amended by adding at the end the following new sentence: If the Secretary rejects an annual report in whole or in part due to the failure to comply with a requirement of section 103 imposed on an accountant, actuary, or other person, the Secretary may assess all or part of the civil penalty against such person. The Secretary may require remediation in place of assessing all or part of a penalty. . Part 5 of subtitle B of title I of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1131 et seq.) is amended by adding at the end the following: If the Secretary finds, after notice and opportunity for a hearing, that an accountant or accounting firm has engaged in any act or practice, or failed to act, in violation of section 103 relating to the preparation and issuance of audit reports, or with professional standards, the Secretary may issue an order to bar an accountant or accounting firm (or division or component of such firm), on a temporary or permanent basis, from directly or indirectly engaging in specified activities relating to performing or supervising plan audits required under section 103. The subject of a debarment order may request a hearing and file an answer not later than 30 days after the date of service of the notice of the debarment order, in accordance with regulations prescribed by the Secretary. Failure to request a hearing within such 30-day period shall constitute a waiver of the right to appear and contest the facts alleged in the debarment order and an admission of the facts alleged in the order for purposes of any related proceedings under this part. Such order shall then become a final agency action under section 704 of title 5, United States Code. The Secretary may modify or terminate an order issued under this section, upon the request of the subject of the order and pursuant to procedures established by the Secretary, if the Secretary determines that such modification or termination is in the interest of plan participants and beneficiaries. The Secretary shall make all final orders under this section (including modified orders) public and shall notify applicable State regulatory organizations upon the issuance of such final orders (including modified orders). Lawsuits by the subject of an order to review the final order of the Secretary may be brought only in the district court of the United States for the district where the subject of the order has its principal office or in the United States District Court for the District of Columbia. The Secretary may promulgate such regulations or other guidance as may be necessary or appropriate to carry out this section. . The table of sections for part 5 of subtitle B of title I of the Employee Retirement Income Security Act of 1974 is amended by adding at the end the following new item: 522. Debarment for deficient audits or for failing to meet qualification standards. . Section 103(a)(3)(C) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1023(a)(3)(C)) is amended by striking if such statements are certified by the bank, similar institution, or insurance carrier as accurate and are made part of the annual report. and inserting except to the extent required under regulations promulgated by the Secretary. . The amendment made by paragraph
(1)shall not become effective until the Secretary has promulgated final regulations with respect to such amendment.
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