109 STAT. 762 PUBLIC LAW 104-67—DEC. 22, 1995 "(C) the term 'covered person' means— "(i) a defendant in any private action arising under this title; or "(ii) a defendant in any private action arising under section 11 of the Securities Act of 1933, who is an outside director of the issuer of the securities that are the subject of the action; and "(D) the term 'outside director' shall have the meaning given such term by rule or regulation of the Commission.". (b) AMENDMENTS TO THE SECURITIES ACT OF 1933.— Section 15 USC 77k. 11(f) of the Securities Act of 1933 (12 U.S.C. 77k(f)) is amended— (1) by striking "All" and inserting "(1) Except as provided in paragraph (2), all"; and (2) by adding at the end the following new paragraph: "(2)(A) The liability of an outside director under subsection (e) shall be determined in accordance with section 38 of the Securities Exchange Act of 1934. "(B) For purposes of this paragraph, the term 'outside director' shall have the meaning given such term by rule or regulation of the Commission.". 15 USC 77k note. SEC. 202. APPLICABILITY. The amendments made by this title shall not affect or apply to any private action arising under the securities laws commenced before and pending on the date of enactment of this Act. 15 USC 78J-1 SEC. 203. RULE OF CONSTRUCTION. Nothing in this Act or the amendments made by this Act shall be deemed to create or ratify any implied private right of action, or to prevent the Commission, by rule or regulation, from restricting or otherwise regulating private actions under the Securities Exchange Act of 1934. TITLE III—AUDITOR DISCLOSURE OF CORPORATE FRAUD SEC. 301. FRAUD DETECTION AND DISCLOSURE. (a) IN GENERAL. —The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is amended by inserting immediately after section 10 the following new section: 15 USC 78J-1. "SEC. lOA. AUDIT REQUIREMENTS. "(a) IN GENERAL. — Each audit required pursuant to this title of the financial statements of an issuer by an independent public accountant shall include, in accordance with generally accepted auditing standards, as may be modified or supplemented from time to time by the Commission— "(1) procedures designed to provide reasonable assurance of detecting illegal acts that would have a direct and material effect on the determination of financial statement amounts; "(2) procedures designed to identify related party transactions that are material to the financial statements or otherwise require disclosure therein; and "(3) an evaluation of whether there is substantial doubt about the ability of the issuer to continue as a going concern during the ensuing fiscal year.