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1 1 (September 18, 2020)

handle is hein.crs/govdbxf0001 and id is 1 raw text is: Researh Sevice Capital Markets and the Holding Foreign Companies Accountable Act-S. 945 and H.R. 7000 September 18, 2020 In May 2020, the Senate passed S. 945, the Holding Foreign Companies Accountable Act (HFCAA), and the House introduced H.R. 7000, a companion bill. These bills would require that foreign companies listed in U.S. stock exchanges be subject to the same accounting and audit oversight as listed domestic companies. This Insight explains the importance of reliable financial statements and disclosures for efficient capital markets and discusses the role of the Public Company Accounting Oversight Board (PCAOB) in ensuring reliable audits of financial statements. It also discusses the specific requirements of the HFCAA and other related legislation. Capital Markets Capital markets are global, and they generally function most efficiently when investors and creditors have a high degree of trust in the quality of information firms communicate. Capital investments have increasingly flowed internationally to and from the United States. Both U.S.-based and many foreign companies rely on U.S. financial markets to raise capital and establish a reliable and consistent trading presence for their securities. Financial reports and disclosures are the primary means by which firms communicate about their performance with investors, creditors, regulators, and the public. Reliable financial statements can provide economy-wide benefits to firms and investors by disseminating accurate information. These benefits are often realized through a more efficient allocation of capital between investors and firms. Investors rely on financial statements to make informed decisions on how best to invest their savings. Investors and other stakeholders, arguably, need to have reasonable assurance that a firm's financial statements are free of material misstatement, whether caused by error or fraud. Congressional Research Service https://crsreports.congress.gov IN11507 CRS NStGHT Prepaimed for Mernbei-s and Committees oi C- --q.. . . . . . . . . . ..----------------------------------------------------------------------------------------------------------------------------------------------------------------------