116STAT.756 PUBLIC LAW 107-204-JULY 30,2002 the findings of the auditor from such transactions and dispositions of the and with are b at a nclude in the reports; anda"angquas8 within such firm on accounting ofessional development,and advance. me, theaceptance and continuation of engage )int eral inspection;and as the Board may ER STAN d satisfy the stan of s prop that hall be designated para all retain full quently r in par STANDARDS. to the t the Board116 STAT. 756 PUBLIC LAW 107–204—JULY 30, 2002 (I) the findings of the auditor from such testing; (II) an evaluation of whether such internal control structure and procedures— (aa) include maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the issuer; (bb) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the issuer are being made only in accord￾ance with authorizations of management and directors of the issuer; and (III) a description, at a minimum, of material weaknesses in such internal controls, and of any material noncompliance found on the basis of such testing. (B) shall include, in the quality control standards that it adopts with respect to the issuance of audit reports, requirements for every registered public accounting firm relating to— (i) monitoring of professional ethics and independ￾ence from issuers on behalf of which the firm issues audit reports; (ii) consultation within such firm on accounting and auditing questions; (iii) supervision of audit work; (iv) hiring, professional development, and advance￾ment of personnel; (v) the acceptance and continuation of engage￾ments; (vi) internal inspection; and (vii) such other requirements as the Board may prescribe, subject to subsection (a)(1). (3) AUTHORITY TO ADOPT OTHER STANDARDS.— (A) IN GENERAL.—In carrying out this subsection, the Board— (i) may adopt as its rules, subject to the terms of section 107, any portion of any statement of auditing standards or other professional standards that the Board determines satisfy the requirements of para￾graph (1), and that were proposed by 1 or more profes￾sional groups of accountants that shall be designated or recognized by the Board, by rule, for such purpose, pursuant to this paragraph or 1 or more advisory groups convened pursuant to paragraph (4); and (ii) notwithstanding clause (i), shall retain full authority to modify, supplement, revise, or subse￾quently amend, modify, or repeal, in whole or in part, any portion of any statement described in clause (i). (B) INITIAL AND TRANSITIONAL STANDARDS.—The Board shall adopt standards described in subparagraph (A)(i) as initial or transitional standards, to the extent the Board determines necessary, prior to a determination of the VerDate 11-MAY-2000 18:56 Aug 07, 2002 Jkt 099139 PO 00204 Frm 00012 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL204.107 APPS24 PsN: PUBL204