---
kind: "section"
citation: "15 U.S.C. § 7211"
title: "15"
title_heading: "Commerce and Trade"
number: "7211"
heading: "Establishment; administrative provisions"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/15/7211"
units:
  - "Chapter 98 — Public Company Accounting Reform and Corporate Responsibility"
  - "Subchapter I — Public Company Accounting Oversight Board"
---

# §7211. Establishment; administrative provisions

- (a) **Establishment of Board—** There is established the Public Company Accounting Oversight [Board](/usc/15/7201.md?p=5), to oversee the [audit](/usc/15/7220.md?p=1) of companies that are subject to the [securities laws](/usc/15/7201.md?p=15), and related matters, in order to protect the interests of investors and further the public interest in the preparation of informative, accurate, and independent [audit reports](/usc/15/7220.md?p=2). The [Board](/usc/15/7201.md?p=5) shall be a body corporate, operate as a nonprofit corporation, and have succession until dissolved by an Act of Congress.
- (b) **Status—** The [Board](/usc/15/7201.md?p=5) shall not be an agency or establishment of the United States Government, and, except as otherwise provided in this Act, shall be subject to, and have all the powers conferred upon a nonprofit corporation by, the District of Columbia Nonprofit Corporation Act. No member or [person](/usc/15/7a.md?p=6) employed by, or agent for, the [Board](/usc/15/7201.md?p=5) shall be deemed to be an officer or employee of or agent for the Federal Government by reason of such service.
- (c) **Duties of the Board—** The [Board](/usc/15/7201.md?p=5) shall, subject to action by the [Commission](/usc/15/7201.md?p=6) under [section 7217 of this title](/usc/15/7217.md), and once a determination is made by the [Commission](/usc/15/7201.md?p=6) under [subsection (d)](#d) of this section—
  - (1) register [public accounting firms](/usc/15/7201.md?p=11) that prepare [audit reports](/usc/15/7220.md?p=2) for [issuers](/usc/15/7201.md?p=7), [brokers](/usc/15/7220.md?p=3), and [dealers](/usc/15/7220.md?p=4), in accordance with [section 7212 of this title](/usc/15/7212.md);
  - (2) establish or adopt, or both, by rule, auditing, quality control, ethics, independence, and other standards relating to the preparation of [audit reports](/usc/15/7220.md?p=2) for [issuers](/usc/15/7201.md?p=7), [brokers](/usc/15/7220.md?p=3), and [dealers](/usc/15/7220.md?p=4), in accordance with [section 7213 of this title](/usc/15/7213.md);
  - (3) conduct inspections of [registered public accounting firms](/usc/15/7201.md?p=12), in accordance with [section 7214 of this title](/usc/15/7214.md) and the [rules of the Board](/usc/15/7201.md?p=13);
  - (4) conduct investigations and disciplinary proceedings concerning, and impose appropriate sanctions where justified upon, [registered public accounting firms](/usc/15/7201.md?p=12) and associated [persons](/usc/15/7a.md?p=6) of such firms, in accordance with [section 7215 of this title](/usc/15/7215.md);
  - (5) perform such other duties or functions as the [Board](/usc/15/7201.md?p=5) (or the [Commission](/usc/15/7201.md?p=6), by rule or order) determines are necessary or appropriate to promote high [professional standards](/usc/15/7220.md?p=5) among, and improve the quality of [audit](/usc/15/7220.md?p=1) services offered by, [registered public accounting firms](/usc/15/7201.md?p=12) and associated [persons](/usc/15/7a.md?p=6) thereof, or otherwise to carry out this Act, in order to protect investors, or to further the public interest;
  - (6) enforce compliance with this Act, the [rules of the Board](/usc/15/7201.md?p=13), [professional standards](/usc/15/7220.md?p=5), and the [securities laws](/usc/15/7201.md?p=15) relating to the preparation and issuance of [audit reports](/usc/15/7220.md?p=2) and the obligations and liabilities of accountants with respect thereto, by [registered public accounting firms](/usc/15/7201.md?p=12) and associated [persons](/usc/15/7a.md?p=6) thereof; and
  - (7) set the budget and manage the operations of the [Board](/usc/15/7201.md?p=5) and the staff of the [Board](/usc/15/7201.md?p=5).
- (d) **Commission determination—** The members of the [Board](/usc/15/7201.md?p=5) shall take such action (including hiring of staff, proposal of rules, and adoption of initial and transitional auditing and other [professional standards](/usc/15/7220.md?p=5)) as may be necessary or appropriate to enable the [Commission](/usc/15/7201.md?p=6) to determine, not later than 270 days after July 30, 2002, that the [Board](/usc/15/7201.md?p=5) is so organized and has the capacity to carry out the requirements of this subchapter, and to enforce compliance with this subchapter by [registered public accounting firms](/usc/15/7201.md?p=12) and associated [persons](/usc/15/7a.md?p=6) thereof. The [Commission](/usc/15/7201.md?p=6) shall be responsible, prior to the appointment of the [Board](/usc/15/7201.md?p=5), for the planning for the establishment and administrative transition to the [Board](/usc/15/7201.md?p=5)’s operation.
- (e) **Board membership—**
  - (1) **Composition—** The [Board](/usc/15/7201.md?p=5) shall have 5 members, appointed from among prominent individuals of integrity and reputation who have a demonstrated commitment to the interests of investors and the public, and an understanding of the responsibilities for and nature of the financial disclosures required of [issuers](/usc/15/7201.md?p=7), [brokers](/usc/15/7220.md?p=3), and [dealers](/usc/15/7220.md?p=4) under the [securities laws](/usc/15/7201.md?p=15) and the obligations of accountants with respect to the preparation and issuance of [audit reports](/usc/15/7220.md?p=2) with respect to such disclosures.
  - (2) **Limitation—** Two members, and only 2 members, of the [Board](/usc/15/7201.md?p=5) shall be or have been certified public accountants pursuant to the laws of 1 or more [States](/usc/15/7201.md?p=16), provided that, if 1 of those 2 members is the chairperson, he or she may not have been a practicing certified public accountant for at least 5 years prior to his or her appointment to the [Board](/usc/15/7201.md?p=5).
  - (3) **Full-time independent service—** Each member of the [Board](/usc/15/7201.md?p=5) shall serve on a full-time basis, and may not, concurrent with service on the [Board](/usc/15/7201.md?p=5), be employed by any other [person](/usc/15/7a.md?p=6) or engage in any other professional or business activity. No member of the [Board](/usc/15/7201.md?p=5) may share in any of the profits of, or receive payments from, a [public accounting firm](/usc/15/7201.md?p=11) (or any other [person](/usc/15/7a.md?p=6), as determined by rule of the [Commission](/usc/15/7201.md?p=6)), other than fixed continuing payments, subject to such conditions as the [Commission](/usc/15/7201.md?p=6) may impose, under standard arrangements for the retirement of members of [public accounting firms](/usc/15/7201.md?p=11).
  - (4) **Appointment of Board members—**
    - (A) **Initial Board—** Not later than 90 days after July 30, 2002, the [Commission](/usc/15/7201.md?p=6), after consultation with the Chairman of the [Board](/usc/15/7201.md?p=5) of Governors of the Federal Reserve System and the Secretary of the Treasury, shall appoint the chairperson and other initial members of the [Board](/usc/15/7201.md?p=5), and shall designate a term of service for each.
    - (B) **Vacancies—** A vacancy on the [Board](/usc/15/7201.md?p=5) shall not affect the powers of the [Board](/usc/15/7201.md?p=5), but shall be filled in the same manner as provided for appointments under this section.
  - (5) **Term of service—**
    - (A) **In general—** The term of service of each [Board](/usc/15/7201.md?p=5) member shall be 5 years, and until a successor is appointed, except that—
      - (i) the terms of office of the initial [Board](/usc/15/7201.md?p=5) members (other than the chairperson) shall expire in annual increments, 1 on each of the first 4 anniversaries of the initial date of appointment; and
      - (ii) any [Board](/usc/15/7201.md?p=5) member appointed to fill a vacancy occurring before the expiration of the term for which the predecessor was appointed shall be appointed only for the remainder of that term.
    - (B) **Term limitation—** No [person](/usc/15/7a.md?p=6) may serve as a member of the [Board](/usc/15/7201.md?p=5), or as chairperson of the [Board](/usc/15/7201.md?p=5), for more than 2 terms, whether or not such terms of service are consecutive.
  - (6) **Removal from office—** A member of the [Board](/usc/15/7201.md?p=5) may be removed by the [Commission](/usc/15/7201.md?p=6) from office, in accordance with [section 7217(d)(3) of this title](/usc/15/7217.md?p=d-3), for good cause shown before the expiration of the term of that member.
- (f) **Powers of the Board—** In addition to any authority granted to the [Board](/usc/15/7201.md?p=5) otherwise in this Act, the [Board](/usc/15/7201.md?p=5) shall have the power, subject to [section 7217 of this title](/usc/15/7217.md)—
  - (1) to sue and be sued, complain and defend, in its corporate name and through its own counsel, with the approval of the [Commission](/usc/15/7201.md?p=6), in any Federal, [State](/usc/15/7201.md?p=16), or other court;
  - (2) to conduct its operations and maintain offices, and to exercise all other rights and powers authorized by this Act, in any [State](/usc/15/7201.md?p=16), without regard to any qualification, licensing, or other provision of law in effect in such [State](/usc/15/7201.md?p=16) (or a political subdivision thereof);
  - (3) to lease, purchase, accept gifts or donations of or otherwise acquire, improve, use, sell, exchange, or convey, all of or an interest in any property, wherever situated;
  - (4) to appoint such employees, accountants, attorneys, and other agents as may be necessary or appropriate, and to determine their qualifications, define their duties, and fix their salaries or other compensation (at a level that is comparable to private sector self-regulatory, accounting, technical, supervisory, or other staff or management positions);
  - (5) to allocate, assess, and collect accounting support fees established pursuant to [section 7219 of this title](/usc/15/7219.md), for the [Board](/usc/15/7201.md?p=5), and other fees and charges imposed under this subchapter; and
  - (6) to enter into contracts, execute instruments, incur liabilities, and do any and all other acts and things necessary, appropriate, or incidental to the conduct of its operations and the exercise of its obligations, rights, and powers imposed or granted by this subchapter.
- (g) **Rules of the Board—** The [rules of the Board](/usc/15/7201.md?p=13) shall, subject to the approval of the [Commission](/usc/15/7201.md?p=6)—
  - (1) provide for the operation and [administration](/usc/15/636e.md?p=1) of the [Board](/usc/15/7201.md?p=5), the exercise of its authority, and the performance of its responsibilities under this Act;
  - (2) permit, as the [Board](/usc/15/7201.md?p=5) determines necessary or appropriate, delegation by the [Board](/usc/15/7201.md?p=5) of any of its functions to an individual member or employee of the [Board](/usc/15/7201.md?p=5), or to a division of the [Board](/usc/15/7201.md?p=5), including functions with respect to hearing, determining, ordering, certifying, reporting, or otherwise acting as to any matter, except that—
    - (A) the [Board](/usc/15/7201.md?p=5) shall retain a discretionary right to review any action pursuant to any such delegated function, upon its own motion;
    - (B) a [person](/usc/15/7a.md?p=6) shall be entitled to a review by the [Board](/usc/15/7201.md?p=5) with respect to any matter so delegated, and the decision of the [Board](/usc/15/7201.md?p=5) upon such review shall be deemed to be the action of the [Board](/usc/15/7201.md?p=5) for all purposes (including appeal or review thereof); and
    - (C) if the right to exercise a review described in [subparagraph (A)](#g-2-A) is declined, or if no such review is sought within the time stated in the [rules of the Board](/usc/15/7201.md?p=13), then the action taken by the holder of such delegation shall for all purposes, including appeal or review thereof, be deemed to be the action of the [Board](/usc/15/7201.md?p=5);
  - (3) establish ethics rules and standards of conduct for [Board](/usc/15/7201.md?p=5) members and staff, including a bar on practice before the [Board](/usc/15/7201.md?p=5) (and the [Commission](/usc/15/7201.md?p=6), with respect to [Board](/usc/15/7201.md?p=5)-related matters) of 1 year for former members of the [Board](/usc/15/7201.md?p=5), and appropriate periods (not to exceed 1 year) for former staff of the [Board](/usc/15/7201.md?p=5); and
  - (4) provide as otherwise required by this Act.
- (h) **Annual report to the Commission—** The [Board](/usc/15/7201.md?p=5) shall submit an annual report (including its audited financial statements) to the [Commission](/usc/15/7201.md?p=6), and the [Commission](/usc/15/7201.md?p=6) shall transmit a copy of that report to the Committee on Banking, Housing, and Urban Affairs of the Senate, and the Committee on Financial Services of the House of Representatives, not later than 30 days after the date of receipt of that report by the [Commission](/usc/15/7201.md?p=6).

## Source credit

(Pub. L. 107–204, title I, § 101, July 30, 2002, 116 Stat. 750; Pub. L. 111–203, title IX, § 982(b), July 21, 2010, 124 Stat. 1928.)

## Notes

### Editorial Notes

### References in Text

This Act, referred to in subsecs. (b), (c)(5), (6), (f), and (g)(1), (4), is Pub. L. 107–204, July 30, 2002, 116 Stat. 745, known as the Sarbanes-Oxley Act of 2002. For complete classification of this Act to the Code, see Tables.

The District of Columbia Nonprofit Corporation Act, referred to in subsec. (b), is Pub. L. 87–569, Aug. 6, 1962, 76 Stat. 265, which is not classified to the Code.

### Constitutionality

For information regarding the constitutionality of certain provisions of this section, see the Table of Laws Held Unconstitutional in Whole or in Part by the Supreme Court on the Constitution Annotated website, constitution.congress.gov.

### Amendments

2010—Subsec. (a). Pub. L. 111–203, § 982(b)(2), substituted “companies that” for “public companies that” and struck out “for companies the securities of which are sold to, and held by and for, public investors” after “independent audit reports”.

Subsecs. (c)(1), (2), (e)(1). Pub. L. 111–203, § 982(b)(1), substituted “issuers, brokers, and dealers” for “issuers”.

### Statutory Notes and Related Subsidiaries

### Effective Date of 2010 Amendment

Amendment by Pub. L. 111–203 effective 1 day after July 21, 2010, except as otherwise provided, see section 4 of Pub. L. 111–203, set out as an Effective Date note under section 5301 of Title 12, Banks and Banking.