Small Business Audit Correction Act of 2026

The Small Business Audit Correction Act of 2026 amends the Sarbanes-Oxley Act to exempt certain small, privately held securities firms from mandatory audits by registered public accounting firms under Public Company Accounting Oversight Board (PCAOB) oversight. The bill defines these eligible firms as "non-carrying" brokers or dealers that do not hold customer funds or securities and have no more than 150 registered representatives. To qualify for this exemption, a firm must also be in good standing, which requires maintaining specific financial capital ratios, having no recent regulatory orders or felony convictions, and remaining free from suspensions by industry associations. The Securities and Exchange Commission and the PCAOB are directed to update their regulations within 180 days of enactment to implement these changes, allowing qualifying firms to satisfy audit obligations through standard generally accepted auditing standards rather than PCAOB-specific requirements.