Trusted Foreign Auditing Act of 2025

Summary

Creates new rules that label certain auditors as “compromised” if they have certain ties to foreign countries identified as national security threats, and then bars trading for U.S. issuers that use those compromised auditors. It also restricts public access to investigatory hearings by the Public Company Accounting Oversight Board (PCAOB): hearings are presumptively nonpublic unless the compromised auditor is a party or the Board orders a public hearing with the parties’ consent. Defines “covered country” by tying it to existing U.S. intelligence and defense lists, updates internal cross-references in current law, and adds the new definitions and trading prohibition to existing Sarbanes–Oxley inspection and enforcement provisions. No new funding or effective date is specified in the text provided.

• Defines “compromised auditor” using four alternative tests tied to control, influence, personnel, operations, or arrangements with certain foreign countries.
• Defines “covered country” by reference to the DNI Annual Threat Assessment and an existing DoD-linked statutory definition.
• Applies an existing trading prohibition to covered issuers headquartered in covered countries that retain compromised auditors.
• Renumbers and updates internal cross-references in the Sarbanes–Oxley audit-inspection provisions to incorporate the new definitions.
• Makes investigatory hearings before the PCAOB presumptively nonpublic unless a compromised auditor is a party or the Board orders public access with party consent.
• Cross-references the new definitions in the PCAOB hearing rules to ensure consistent application.
• Does not specify new funding or an effective date in the provided text.
• Expands national-security-based triggers for oversight of auditors and issuers, linking accounting oversight to intelligence and defense determinations.