Text: HSB00657 Text: HSB00659 Text: HSB00600 - HSB00699 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Section 1. NEW SECTION. 542D.1 TITLE. 1 2 This chapter shall be known and may be cited as the "Iowa 1 3 Accountancy Act of 2000". 1 4 Sec. 2. NEW SECTION. 542D.2 LEGISLATIVE INTENT. 1 5 It is the policy of this state, and the purpose of this 1 6 chapter, to promote the reliability of information that is 1 7 used for guidance in financial transactions or for accounting 1 8 for or assessing the financial status or performance of 1 9 commercial, noncommercial, and governmental enterprises. The 1 10 public interest requires that persons professing special 1 11 competence in accountancy or offering assurance as to the 1 12 reliability or fairness of presentation of such information 1 13 shall have demonstrated their qualifications to do so, and 1 14 that persons who have not demonstrated and maintained such 1 15 qualifications not be permitted to represent themselves as 1 16 having such special competence or to offer such assurance; 1 17 that the conduct of persons licensed as having special 1 18 competence in accountancy be regulated in all aspects of their 1 19 professional work; that a public authority competent to 1 20 prescribe and assess the qualifications and to regulate the 1 21 conduct of licensees be established; and that the use of 1 22 titles that have a capacity or tendency to deceive the public 1 23 as to the status or competence of the persons using such 1 24 titles be prohibited. 1 25 Sec. 3. NEW SECTION. 542D.3 DEFINITIONS. 1 26 As used in this chapter, unless the context otherwise 1 27 requires: 1 28 1. "Accounting practitioner" means a person licensed by 1 29 the board who does not hold a certificate as a certified 1 30 public accountant under this chapter, and who offers to 1 31 perform or performs for the public, and for compensation, any 1 32 of the following services: 1 33 a. Records financial transactions in books of record. 1 34 b. Makes adjustments of financial transactions in books of 1 35 record. 2 1 c. Makes trial balances from books of record. 2 2 d. Prepares internal verification and analysis of books or 2 3 accounts of original entry. 2 4 e. Prepares financial statements, schedules, or reports. 2 5 f. Devises and installs systems or methods of bookkeeping, 2 6 internal controls of financial data, or the recording of 2 7 financial data. 2 8 2. "Accounting practitioner firm" means a sole 2 9 proprietorship, a corporation, a partnership, or any other 2 10 form of organization issued a permit to practice as a firm of 2 11 accounting practitioners under section 542D.7. 2 12 3. "Attest" or "attest service" means providing any of the 2 13 following services: 2 14 a. An audit or other engagement to be performed in 2 15 accordance with the statements on auditing standards. 2 16 b. A review of a financial statement to be performed in 2 17 accordance with the statement on standards for accounting and 2 18 review services. 2 19 c. An examination of prospective financial information to 2 20 be performed in accordance with the statements on standards 2 21 for attestation engagements. For purposes of this subsection, 2 22 the statements on standards for attestation engagements means 2 23 those standards adopted by the board, by rule, by reference to 2 24 the standards developed for general application by the 2 25 American institute of certified public accountants, or other 2 26 recognized national accountancy organization. 2 27 4. "Board" means the Iowa accountancy examining board 2 28 established under section 542D.4. 2 29 5. "Certificate" means a certificate as a certified public 2 30 accountant issued under section 542D.6, or a corresponding 2 31 certificate as certified public accountant issued after 2 32 examination under the law of any other state. 2 33 6. "Certified public accounting firm" means a sole 2 34 proprietorship, a corporation, a partnership, or any other 2 35 form of organization issued a permit to practice as a firm of 3 1 certified public accountants under section 542D.7. 3 2 7. "Client" means a person or entity that agrees with a 3 3 licensee or licensee's employer to receive a professional 3 4 service. 3 5 8. "Commission" means a brokerage or other participation 3 6 fee. "Commission" does not include a contingent fee. 3 7 9. "Compilation" means a service performed in accordance 3 8 with statements on standards for accounting and review 3 9 services and presented in the form of financial statements, 3 10 which provides information that is the representation of the 3 11 service provider without undertaking to express any assurance 3 12 on the statements. 3 13 10. "Contingent fee" means a fee established for the 3 14 performance of a service pursuant to an arrangement under 3 15 which a fee will not be charged unless a specified finding or 3 16 result is attained, or under which the amount of the fee is 3 17 otherwise dependent upon the finding or result of such 3 18 service. "Contingent fee" does not mean a fee fixed by a 3 19 court or other public authority, or a fee related to any tax 3 20 matter which is based upon the results of a judicial 3 21 proceeding or the findings of a governmental agency. 3 22 11. "License" means a certificate issued under section 3 23 542D.6, a permit issued under section 542D.7, or a license 3 24 issued under section 542D.8; or a certificate or permit issued 3 25 under corresponding prior law. 3 26 12. "Licensee" means the holder of a license. 3 27 13. "Manager" means a manager of a limited liability 3 28 company. 3 29 14. "Member" means a member of a limited liability 3 30 company. 3 31 15. "Peer review" means a study, appraisal, or review of 3 32 one or more aspects of the professional work of a licensee or 3 33 certified public accountant firm that performs attest or 3 34 compilation services, by a person or persons who hold 3 35 certificates and who are not affiliated with the certificate 4 1 holder or certified public accountant firm being reviewed. 4 2 16. "Peer review records" means a file, report, or other 4 3 information relating to the professional competence of an 4 4 applicant in the possession of a peer review team, or 4 5 information concerning the peer review developed by a peer 4 6 review team in the possession of an applicant. 4 7 17. "Peer review team" means a person or organization 4 8 participating in the peer review function, but does not 4 9 include the board. 4 10 18. "Permit" means a permit to practice as either a 4 11 certified public accountant or accounting practitioner firm 4 12 issued under section 542D.7 or under corresponding provisions 4 13 of the laws of other states. 4 14 19. "Professional" means arising out of or related to the 4 15 specialized knowledge or skills associated with a certified 4 16 public accountant. 4 17 20. "Report", when used with reference to financial 4 18 statements, means a report, opinion, or other form of a 4 19 writing that states or implies assurance as to the reliability 4 20 of any financial statements and that includes or is 4 21 accompanied by a statement or implication that the person or 4 22 firm issuing the report has special knowledge or competence in 4 23 accounting or auditing. Such statement or implication of 4 24 special knowledge or competence may arise from use by the 4 25 issuer of the report of names or titles indicating that the 4 26 person or firm is an accountant or auditor, or from the 4 27 language of the report itself. "Report" includes any form of 4 28 language which disclaims an opinion when such form of language 4 29 is conventionally understood to imply a positive assurance as 4 30 to the reliability of the financial statements referred to or 4 31 special knowledge or competence on the part of the person or 4 32 firm issuing the language, and any other form of language that 4 33 is conventionally understood to imply such assurance or such 4 34 special knowledge or competence. 4 35 21. "State" means a state of the United States, the 5 1 District of Columbia, Puerto Rico, the United States Virgin 5 2 Islands, or Guam. 5 3 22. "Substantial equivalency" is a determination by the 5 4 board or its designee that the education, examination, and 5 5 experience requirements contained in the statutes and 5 6 administrative rules of another jurisdiction are comparable 5 7 to, or exceed, the education, examination, and experience 5 8 requirements contained in this chapter or that an individual 5 9 certified public accountant's education, examination, and 5 10 experience qualifications are comparable to or exceed the 5 11 education, examination, and experience requirements contained 5 12 in this chapter. 5 13 Sec. 4. NEW SECTION. 542D.4 STATE BOARD OF ACCOUNTANCY. 5 14 1. An Iowa accountancy examining board is created within 5 15 the professional licensing and regulation division of the 5 16 department of commerce to administer and enforce this chapter. 5 17 The board shall consist of eight members, appointed by the 5 18 governor and subject to senate confirmation, all of whom shall 5 19 be residents of this state. Five of the eight members shall 5 20 be holders of certificates issued under section 542D.6, one 5 21 member shall be the holder of a license issued under section 5 22 542D.8, and two shall not be certified public accountants or 5 23 licensed accounting practitioners and shall represent the 5 24 general public. Professional associations or societies 5 25 composed of certified public accountants or licensed 5 26 accounting practitioners may recommend the names of potential 5 27 board members to the governor. However, the governor is not 5 28 bound by the recommendations. A board member is not required 5 29 to be a member of any professional association or society 5 30 composed of certified public accountants or licensed 5 31 accounting practitioners. The term of each member of the 5 32 board shall be three years, as designated by the governor, and 5 33 appointments to the board are subject to the requirements of 5 34 sections 69.16, 69.16A, and 69.19. Members of the board 5 35 appointed and serving pursuant to chapter 542C, Code 2001, on 6 1 the effective date of this Act shall serve out the terms for 6 2 which they were appointed. Vacancies occurring during a term 6 3 shall be filled by appointment by the governor for the 6 4 unexpired term. Upon the expiration of the member's term of 6 5 office, a member shall continue to serve until a successor 6 6 shall have been appointed and taken office. Any member of the 6 7 board whose certificate under section 542D.6 is revoked or 6 8 suspended shall automatically cease to be a member of the 6 9 board, and the governor may, after a hearing, remove any 6 10 member of the board for neglect of duty or other just cause. 6 11 A person who has served three successive complete terms shall 6 12 not be eligible for reappointment, but appointment to fill an 6 13 unexpired term shall not be considered a complete term for 6 14 this purpose. 6 15 2. The board shall elect annually from among its members a 6 16 chairperson and such other officers as the board may determine 6 17 to be appropriate. The board shall meet at such times and 6 18 places as may be fixed by the board. Meetings of the board 6 19 shall be open to the public except insofar as they are 6 20 concerned with investigations under section 542D.11 and except 6 21 as may be necessary to protect information that is required to 6 22 be kept confidential by the laws of this state. A majority of 6 23 the board members in office shall constitute a quorum at any 6 24 meeting. The board shall retain or arrange for the retention 6 25 of all applications and all documents under oath that are 6 26 filed with the board and also records of its proceedings, and 6 27 the board shall maintain a registry of the names and addresses 6 28 of all licensees and permittees under this chapter. In any 6 29 proceeding in court, civil or criminal, arising out of or 6 30 founded upon any provision of this chapter, copies of any 6 31 records certified as true copies under the seal of the board 6 32 shall be admissible in evidence as tending to prove the 6 33 contents of the records. 6 34 3. Members of the board are entitled to receive a per diem 6 35 as specified in section 7E.6 for each day spent on performance 7 1 of duties as members and shall be reimbursed for all actual 7 2 and necessary expenses incurred in the performance of duties 7 3 as members. 7 4 4. All moneys collected by the board from fees authorized 7 5 to be charged by this chapter shall be received and accounted 7 6 for by the board and shall be paid monthly to the treasurer of 7 7 state for deposit in the general fund of the state. Expenses 7 8 of administering this chapter shall be paid from 7 9 appropriations made by the general assembly, which expenses 7 10 may include, but shall not be limited to, the costs of 7 11 conducting investigations and of taking testimony and 7 12 procuring the attendance of witnesses before the board or its 7 13 committees; all legal proceedings taken under this chapter for 7 14 the enforcement of this chapter; and educational programs for 7 15 the benefit of the public and licensees and their employees. 7 16 5. A member of the board shall maintain the 7 17 confidentiality of information relating to the following: 7 18 a. Criminal history or prior misconduct of the applicant. 7 19 b. Information relating to the contents of the 7 20 examination. 7 21 c. Information relating to the examination results other 7 22 than final score except for information about the results of 7 23 the examination given to the person examined. 7 24 A member of the board who willfully communicates or seeks 7 25 to communicate such information in a manner which violates 7 26 confidentiality requirements, and any person who willfully 7 27 requests, obtains, or seeks to obtain such information, is 7 28 guilty of a simple misdemeanor. 7 29 6. The board may employ an executive secretary and such 7 30 other personnel as it deems necessary in its administration 7 31 and enforcement of this chapter. The board may appoint 7 32 committees or persons to advise or assist the board in such 7 33 administration and enforcement as the board sees fit. The 7 34 board may retain its own counsel to advise and assist it in 7 35 addition to such advice and assistance as is provided by the 8 1 attorney general, notwithstanding section 13.7. 8 2 7. The board may join professional organizations and 8 3 associations to promote the improvement of the standards of 8 4 practice of accountancy and for the protection and welfare of 8 5 the public. In order to be informed about the operations and 8 6 practices of other boards of accountancy throughout the 8 7 country and to promote uniformity in the regulation of 8 8 operations and practices, the board, executive secretary, and 8 9 staff shall, at the discretion of the board, travel and attend 8 10 national and regional meetings of the national association of 8 11 state boards of accountancy and other appropriate professional 8 12 meetings at the expense of the board. 8 13 8. The board shall have the power to take all action that 8 14 is necessary and proper to effectuate the purposes of this 8 15 chapter, including the power to sue and be sued in its 8 16 official name as an agency of this state. The board shall 8 17 also have the power to issue subpoenas to compel the 8 18 attendance of witnesses and the production of documents; to 8 19 administer oaths; to take testimony; to cooperate with the 8 20 appropriate authorities in other states in investigation and 8 21 enforcement concerning violations of this chapter and 8 22 comparable statutes of other states; and to receive evidence 8 23 concerning all matters within the scope of this chapter. In 8 24 case of disobedience of a subpoena, the board may invoke the 8 25 aid of any district court in requiring the attendance and 8 26 testimony of witnesses and the production of documentary 8 27 evidence. The board, its members, and its agents shall be 8 28 immune from personal liability for actions taken in good faith 8 29 in the discharge of the board's responsibilities, and the 8 30 state shall hold the board, its members, and its agents 8 31 harmless from all costs, damages, and attorney fees arising 8 32 from claims and suits against them with respect to matters to 8 33 which such immunity applies. 8 34 9. The board shall adopt rules pursuant to chapter 17A 8 35 governing the administration and enforcement of this chapter 9 1 and the conduct of licensees and permittees. Rules adopted 9 2 shall include, but not be limited to, the following: 9 3 a. Rules governing the board's meetings and the conduct of 9 4 its business. 9 5 b. Rules of procedure governing the conduct of 9 6 investigations and hearings by the board. 9 7 c. Rules specifying the educational and experience 9 8 qualifications required for the issuance of a certificate 9 9 under section 542D.6 and the continuing professional education 9 10 required for renewal of a certificate under section 542D.6. 9 11 d. Rules specifying the educational and experience 9 12 qualifications required for the issuance of a license under 9 13 section 542D.8 and the continuing professional education 9 14 required for renewal of a license under section 542D.6. 9 15 e. Rules of professional conduct directed to control the 9 16 quality and probity of services provided by a licensee, and, 9 17 among other areas, pertaining to a licensee's independence, 9 18 integrity, and objectivity; competence and technical 9 19 standards; responsibilities to the public; and 9 20 responsibilities to a client. 9 21 f. Rules governing the professional standards applicable 9 22 to a licensee. 9 23 g. Rules governing the manner and circumstances of use of 9 24 the titles "certified public accountant" and "CPA". 9 25 h. Rules governing the manner and circumstances of use of 9 26 the titles "accounting practitioner" and "AP". 9 27 i. Rules regarding peer review that may be required to be 9 28 performed under this chapter. 9 29 j. Rules on substantial equivalence under section 542D.20. 9 30 k. Such other rules as the board deems necessary or 9 31 appropriate for administering this chapter, including, but not 9 32 limited to, rules of professional conduct, pertaining to 9 33 corporations or limited liability companies practicing 9 34 accounting, which the board deems consistent with or required 9 35 by the public welfare. The board may adopt rules governing 10 1 the style, name, and title of corporations and limited 10 2 liability companies and governing the affiliation of 10 3 corporations and limited liability companies with other 10 4 organizations. 10 5 Sec. 5. NEW SECTION. 542D.5 QUALIFICATIONS FOR A 10 6 CERTIFICATE AS A CERTIFIED PUBLIC ACCOUNTANT. 10 7 1. A certificate as a certified public accountant shall be 10 8 issued to a person of good moral character who meets the 10 9 education, examination, and experience requirements of this 10 10 section and who makes application pursuant to section 542D.6. 10 11 2. For purposes of this section, "good moral character" 10 12 means lack of a history of dishonest or felonious acts. The 10 13 board may refuse to issue a certificate on the ground of 10 14 failure to satisfy this requirement only if there is a 10 15 substantial connection between the lack of good moral 10 16 character of the applicant and the professional 10 17 responsibilities of a licensee and if the finding by the board 10 18 of lack of good moral character is supported by clear and 10 19 convincing evidence. If an applicant is found to be 10 20 unqualified for a certificate because of a lack of good moral 10 21 character, the board shall furnish the applicant a statement 10 22 containing the findings of the board, a complete record of the 10 23 evidence upon which the determination was based, and a notice 10 24 of the applicant's right of appeal. 10 25 3. The education requirement for a certificate is as 10 26 follows: 10 27 a. On or before December 31, 2000, the applicant has 10 28 attained either of the following: 10 29 (1) A baccalaureate degree conferred by a college or 10 30 university recognized by the board, in addition to one of the 10 31 following: 10 32 (a) A concentration in accounting, or what the board 10 33 determines to be substantially equivalent. 10 34 (b) A nonaccounting concentration, supplemented by what 10 35 the board determines to be substantially the equivalent of an 11 1 accounting concentration, including related courses in other 11 2 areas of business administration. 11 3 (2) A graduate of a high school having at least a four- 11 4 year course of study or its equivalent as determined by the 11 5 board and no less than three years of continuous experience 11 6 under the direct supervision of a certified public accountant 11 7 holding a certificate to practice, which experience shall 11 8 include a significant amount of accounting work involving 11 9 third-party reliance on financial statements. 11 10 b. On or after January 1, 2001, the applicant completes at 11 11 least one hundred fifty semester hours, or the trimester or 11 12 quarter equivalent of one hundred fifty semester hours, of 11 13 college education, and receives a baccalaureate or higher 11 14 degree conferred by a college or university recognized by the 11 15 board, the total educational program to include a 11 16 concentration in accounting or what the board determines to be 11 17 substantially equivalent. Except as otherwise provided under 11 18 this section, a person who has partially passed the 11 19 examination required by section 542D.8, subsection 3, by 11 20 passing one or more subjects prior to December 31, 2000, has 11 21 until December 31, 2003, to successfully complete the 11 22 examination process and qualify for a certificate under the 11 23 educational requirements in effect prior to December 31, 2000. 11 24 4. The examination under section 542D.8, subsection 3, 11 25 shall be offered at least twice a year, and shall test the 11 26 applicant's knowledge of the subjects of accounting and 11 27 auditing, and such other related subjects as the board may 11 28 specify by rule, including but not limited to business law and 11 29 taxation. The examination shall be held at a time determined 11 30 by the board and may be changed from time to time. The board 11 31 shall prescribe by rule the methods of applying for and 11 32 conducting the examination, including methods for grading and 11 33 determining a passing grade required of an applicant for a 11 34 certificate. However, the board, to the extent possible, 11 35 shall ensure the examination, grading of the examination, and 12 1 the passing grades are uniform with those applicable in all 12 2 other states. The board may make such use of all or any part 12 3 of the uniform certified public accountant examination and 12 4 advisory grading service of the American institute of 12 5 certified public accountants, and may contract with third 12 6 parties to perform such administrative services with respect 12 7 to the examination as it deems appropriate to perform the 12 8 duties of the board with respect to examination. 12 9 5. The board may admit to the examination a candidate who 12 10 will complete the educational requirements for a baccalaureate 12 11 degree within one hundred twenty days immediately following 12 12 the date of the examination or who has completed those 12 13 requirements. However, the board shall not report the results 12 14 of the examination until the candidate has met the educational 12 15 requirements for a baccalaureate degree and shall not issue 12 16 the certificate until the candidate has fully satisfied the 12 17 requirements of subsection 3. 12 18 6. An applicant who has failed the examination may request 12 19 in writing information from the board concerning the 12 20 applicant's examination grade and subject areas or questions 12 21 which the applicant failed to answer correctly, except that if 12 22 the board administers a uniform, standardized examination, the 12 23 board shall only be required to provide the examination grade 12 24 and such other information concerning the applicant's 12 25 examination results which are available to the board. 12 26 7. The board, by rule, may establish an examination fee to 12 27 be charged each applicant by the board or by a third party 12 28 administering the examination. 12 29 8. An applicant for initial issuance of a certificate must 12 30 have no less than one year of experience. The experience 12 31 shall include providing any type of service or advice 12 32 involving the use of accounting, attest, compilation, 12 33 management advisory, financial advisory, tax, or consulting 12 34 skills, as verified by a licensee, meeting requirements 12 35 prescribed by the board by rule. The experience is acceptable 13 1 if it was gained through employment in government, industry, 13 2 academia, or public practice. 13 3 9. A person holding a certificate as a certified public 13 4 accountant issued by the state prior to July 1, 2001, is 13 5 deemed to have met the requirements of this section. 13 6 Sec. 6. NEW SECTION. 542D.6 ISSUANCE AND RENEWAL OF 13 7 CERTIFICATES – MAINTENANCE OF COMPETENCY. 13 8 1. a. The board shall issue or renew a certificate to a 13 9 person who makes application on a form prescribed and 13 10 furnished by the board and who demonstrates either of the 13 11 following: 13 12 (1) That the person's qualifications, including where 13 13 applicable the qualifications prescribed by section 542D.5, 13 14 satisfy the requirements of this section. 13 15 (2) That the person is eligible under the substantial 13 16 equivalency standard provided for under section 542D.20, 13 17 subsection 1, paragraph "a" or "b", which requires licensure 13 18 for a certified public accountant who establishes a principal 13 19 place of business in another state. 13 20 b. The holder of a certificate issued under this section 13 21 shall only provide attest services in a certified public 13 22 accountant firm that is issued a permit under section 542D.7. 13 23 2. A certificate shall be initially issued, and renewed, 13 24 for a period of not more than three years, but in any event 13 25 shall expire on June 30 of the year of expiration. An 13 26 application for a certificate shall be made in such form, and 13 27 in the case of an application for renewal, between such dates, 13 28 as the board shall specify by rule, and the board shall grant 13 29 or deny such application within thirty days after the 13 30 application is filed in proper form. If the applicant seeks 13 31 the opportunity to show that issuance or renewal of a 13 32 certificate was mistakenly denied, or the board is not able to 13 33 determine whether the application should be granted or denied, 13 34 the board may issue to the applicant a provisional certificate 13 35 which shall expire ninety days after its issuance or when the 14 1 board determines whether or not to issue or renew the 14 2 certificate for which application was made, whichever occurs 14 3 first. 14 4 3. a. An applicant who does not qualify for reciprocity 14 5 under the substantial equivalency standard established in 14 6 section 542D.20, subsection 1, paragraph "b", shall be issued 14 7 a certificate by the board if the applicant is a holder of a 14 8 certificate, license, or permit issued by another state, and 14 9 shows all of the following: 14 10 (1) The applicant passed the examination required for 14 11 issuance of the applicant's certificate with grades that would 14 12 have been passing grades at the time in this state. 14 13 (2) The applicant has four years of experience outside of 14 14 this state which includes the type of service or advice that 14 15 satisfies the requirements of section 542D.5, subsection 8, or 14 16 meets equivalent requirements prescribed by the board by rule, 14 17 after passing the examination upon which the applicant's 14 18 certificate was based and within the ten years immediately 14 19 preceding the application. 14 20 (3) If the applicant's certificate, license, or permit was 14 21 issued more than four years prior to the application for 14 22 issuance of an initial certificate under this section, that 14 23 the applicant has fulfilled the requirements of continuing 14 24 professional education that would have been applicable under 14 25 subsection 4. 14 26 b. As an alternative to the requirements of paragraph "a", 14 27 a certificate holder licensed by another state who desires to 14 28 establish the holder's principal place of business in this 14 29 state shall request the issuance of a certificate from the 14 30 board prior to establishing such principal place of business. 14 31 The board shall issue a certificate to an individual who 14 32 obtains from the board or the national association of state 14 33 boards of accountancy's national qualification appraisal 14 34 service verification that the individual's certified public 14 35 accountant qualifications are substantially equivalent to the 15 1 certified public accountant certificate requirements of this 15 2 chapter. 15 3 c. An application under this section may be made through 15 4 the national association of state boards of accountancy's 15 5 national qualification appraisal service. 15 6 4. A certificate holder or licensee, for renewal of a 15 7 certificate under this section or renewal of a license under 15 8 section 542D.8, shall participate in a program of learning 15 9 designed to maintain professional competency. Such program of 15 10 learning must comply with rules adopted by the board. The 15 11 board, by rule, may grant an exception to this requirement for 15 12 a certificate or license holder who does not perform or offer 15 13 to perform for the public one or more kinds of services 15 14 involving the use of accounting or auditing skills, including 15 15 issuance of reports on financial statements or the use of one 15 16 or more kinds of management advisory, financial advisory, or 15 17 consulting services, or the preparation of tax returns or the 15 18 furnishing of advice on tax matters. A licensee granted an 15 19 exception by the board shall place the word "inactive" 15 20 adjacent to the licensee's certified public accountant title 15 21 or accounting practitioner title on any business card, 15 22 letterhead, or other document or device, with the exception of 15 23 the licensee's certified public accountant certificate or 15 24 accounting practitioner registration, on which the licensee's 15 25 certified public accountant or accounting practitioner title 15 26 appears. 15 27 5. The board shall charge an application fee for initial 15 28 issuance or renewal of a certificate in an amount prescribed 15 29 by the board by rule. 15 30 6. An applicant for initial issuance or renewal of a 15 31 certificate shall list in the application all states in which 15 32 the applicant has applied for or holds a certificate, license, 15 33 or permit and list any past denial, revocation, or suspension 15 34 of a certificate, license, or permit. A holder of or 15 35 applicant for a certificate under this section shall notify 16 1 the board in writing, within thirty days after its occurrence, 16 2 of any issuance, denial, revocation, or suspension of a 16 3 certificate, license, or permit by another state. 16 4 7. The board shall issue a certificate to a holder of a 16 5 substantially equivalent foreign designation, upon 16 6 satisfaction of all of the following: 16 7 a. The foreign authority which issued the designation 16 8 allows a person who holds a valid certificate issued by this 16 9 state to obtain such foreign authority's comparable 16 10 designation. 16 11 b. The foreign designation satisfies all of the following: 16 12 (1) The designation was issued by a foreign authority that 16 13 regulates the practice of public accountancy and the foreign 16 14 designation has not expired or been revoked or suspended. 16 15 (2) The designation entitles the holder to issue reports 16 16 on financial statements. 16 17 (3) The designation was issued upon the basis of 16 18 education, examination, and experience requirements 16 19 established by the foreign authority or by law. 16 20 c. The applicant satisfies all of the following: 16 21 (1) The designation was issued based on education and 16 22 examination standards substantially equivalent to those in 16 23 effect in this state at the time the foreign designation was 16 24 granted. 16 25 (2) The applicant satisfies an experience requirement, 16 26 substantially equivalent to the requirement set out in section 16 27 542D.5, subsection 8, in the jurisdiction which issued the 16 28 foreign designation or has completed four years of 16 29 professional experience in this state; or meets equivalent 16 30 requirements prescribed by the board by rule, within the ten 16 31 years immediately preceding the application. 16 32 (3) The applicant has passed qualifying examinations in 16 33 national standards and the laws, rules, and code of ethical 16 34 conduct in effect in this state. 16 35 8. An applicant under subsection 7 shall list in the 17 1 application all jurisdictions, foreign and domestic, in which 17 2 the applicant has applied for or holds a designation to 17 3 practice public accountancy. A holder of a certificate issued 17 4 under this section shall notify the board in writing, within 17 5 thirty days after its occurrence, of any issuance, denial, 17 6 revocation, or suspension of a designation or commencement of 17 7 a disciplinary or enforcement action by any jurisdiction. 17 8 9. The board has sole authority to interpret the 17 9 application of subsections 7 and 8. 17 10 10. The board, by rule, shall require as a condition for 17 11 renewal of a certificate under this section, by any 17 12 certificate holder who performs compilation services for the 17 13 public other than through a certified public accountant firm, 17 14 that such individual undergo, no more frequently than once 17 15 every three years, a peer review conducted in such manner as 17 16 the board shall by rule specify, and such review shall include 17 17 verification that such individual has met the competency 17 18 requirements set out in professional standards for such 17 19 services. 17 20 Sec. 7. NEW SECTION. 542D.7 FIRM PERMITS TO PRACTICE – 17 21 ATTEST EXPERIENCE AND PEER REVIEW. 17 22 1. The board shall issue or renew a permit to practice as 17 23 a certified public accountant firm or accounting practitioner 17 24 firm to a person that makes application and demonstrates the 17 25 qualifications set forth in this section, or to a certified 17 26 public accountant firm originally licensed in another state 17 27 that establishes an office in this state. A firm must hold a 17 28 permit issued under this section in order to provide attest 17 29 services or to use the title "CPAs" or "APs" or "CPA firm" or 17 30 "AP firm". 17 31 2. A permit shall be initially issued and renewed for a 17 32 period of not more than three years, but in any event shall 17 33 expire on June 30 of the year of expiration. An application 17 34 for a permit shall be made in such form, and in the case of an 17 35 application for renewal, between such dates as the board may 18 1 by rule specify, and the board shall grant or deny an 18 2 application within thirty days after the application is filed. 18 3 If the applicant seeks the opportunity to show that issuance 18 4 or renewal of a permit was mistakenly denied, or if the board 18 5 is not able to determine whether an application should be 18 6 granted or denied, the board may issue to the applicant a 18 7 provisional permit, which shall expire ninety days after its 18 8 issuance or when the board determines whether or not to issue 18 9 or renew the permit for which application was made, whichever 18 10 occurs first. 18 11 3. An applicant for initial issuance or renewal of a 18 12 permit to practice as a firm must show all of the following: 18 13 a. Notwithstanding any other provision of law, a simple 18 14 majority of the ownership of the firm, in terms of financial 18 15 interests and voting rights of all partners, officers, 18 16 shareholders, members, or managers, belongs to holders of a 18 17 certificate issued by a state, and such partners, officers, 18 18 shareholders, members, or managers whose principal place of 18 19 business is in this state, and who perform professional 18 20 services in this state, hold a certificate issued under 18 21 section 542D.6 or a license under section 542D.8. Although 18 22 firms may include nonlicensee owners, the firm and its 18 23 ownership must comply with ownership rules adopted by the 18 24 board. 18 25 b. A certified public accountant or accounting 18 26 practitioner firm may include nonlicensee owners provided 18 27 that: 18 28 (1) The firm designates a licensee of this state who is 18 29 responsible for the proper registration of the firm and 18 30 identifies that individual to the board. 18 31 (2) All nonlicensee owners are active individual 18 32 participants in the certified public accountant or accounting 18 33 practitioner firm or affiliated entities. 18 34 (3) The firm complies with such other requirements as the 18 35 board may impose by rule. 19 1 c. An individual certificate holder who is responsible for 19 2 supervising attest or compilation services and signs or 19 3 authorizes someone to sign the accountant's report on the 19 4 financial statements on behalf of the firm, shall meet the 19 5 competency requirements set out in the professional standards 19 6 for such services. 19 7 d. An individual certificate holder who signs or 19 8 authorizes someone to sign the accountant's report on the 19 9 financial statements on behalf of the firm shall meet the 19 10 competency requirements set out in the professional standards 19 11 for such services. 19 12 4. An applicant for initial issuance or renewal of a 19 13 permit to practice as a certified public accountant firm is 19 14 required to register each office of the firm within this state 19 15 with the board and to show that all attest and compilation 19 16 services rendered in this state are under the charge of a 19 17 person holding a valid certificate issued under section 542D.6 19 18 or by some other state. 19 19 5. The board, by rule, shall establish and charge an 19 20 application fee for each application for initial issuance or 19 21 renewal of a permit. 19 22 6. An applicant for initial issuance or renewal of a 19 23 permit shall list in the application all states in which the 19 24 applicant has applied for or holds a permit as a certified 19 25 public accountant or accounting practitioner firm and list any 19 26 past denial, revocation, or suspension of a permit by another 19 27 state. A holder of or applicant for a permit shall notify the 19 28 board in writing within thirty days after an occurrence of any 19 29 of the following: 19 30 a. A change in the identity of a partner, officer, 19 31 shareholder, member, or manager whose principal place of 19 32 business is in this state. 19 33 b. A change in the number or location of offices within 19 34 this state. 19 35 c. A change in the identity of a person in charge of such 20 1 offices. 20 2 d. The issuance, denial, revocation, or suspension of a 20 3 permit by another state. 20 4 7. A firm, after receiving or renewing a permit which is 20 5 not in compliance with this section as a result of a change in 20 6 firm ownership or personnel, shall take corrective action to 20 7 bring the firm back into compliance as quickly as possible or 20 8 apply to modify or amend the permit. The board may grant a 20 9 reasonable period of time for a firm to take such corrective 20 10 action. Failure to comply within a reasonable period as 20 11 deemed by the board shall result in the suspension or 20 12 revocation of the firm permit. 20 13 8. The board, by rule, shall require as a condition to 20 14 renewal of a permit to practice as a certified public 20 15 accountant firm, that an applicant undergo, no more frequently 20 16 than once every three years, a peer review conducted in such 20 17 manner as the board specifies. The review shall include a 20 18 verification that any individual in the firm who is 20 19 responsible for supervising attest and compilation services 20 20 and who signs or authorizes someone to sign the accountant's 20 21 report on a financial statement on behalf of the firm meets 20 22 the competency requirements set forth in the professional 20 23 standards for such services. 20 24 Such rules shall include reasonable provision for 20 25 compliance by an applicant showing that the applicant, within 20 26 the preceding three years, has undergone a peer review that is 20 27 a satisfactory equivalent to the peer review required under 20 28 this subsection. An applicant's completion of a peer review 20 29 program endorsed or supported by the American institute of 20 30 certified public accountants, or other substantially similar 20 31 review as determined by the board, satisfies the requirements 20 32 of this subsection. 20 33 9. An applicant for a permit to practice as a certified 20 34 public accountant firm, at the time of renewal, may request in 20 35 writing upon forms provided by the board, a waiver from the 21 1 requirements of subsection 8. The board may grant a waiver 21 2 upon a showing satisfactory to the board of any of the 21 3 following: 21 4 a. The applicant does not engage in, and does not intend 21 5 to engage in during the following year, financial reporting 21 6 areas of practice, including but not limited to financial 21 7 audits, compilations, and reviews. An applicant granted a 21 8 waiver pursuant to this paragraph shall immediately notify the 21 9 board if the applicant engages in such practice, and shall be 21 10 subject to peer review. 21 11 b. Reasons of health. 21 12 c. Military service. 21 13 d. Instances of hardship. 21 14 e. Other good cause as determined by the board. 21 15 10. Peer review records are privileged and confidential, 21 16 and are not subject to discovery, subpoena, or other means of 21 17 legal compulsion. Peer review records are not admissible in 21 18 evidence in a judicial, administrative, or arbitration 21 19 proceeding. Information or documents discoverable from 21 20 sources other than a peer review team do not become 21 21 nondiscoverable from such other sources because they are made 21 22 available to or are in the possession of a peer review team. 21 23 Information or documents publicly available from the American 21 24 institute of certified public accountants relating to quality 21 25 or peer review are not privileged or confidential under this 21 26 subsection. A person or organization participating in the 21 27 peer review process shall not testify as to the findings, 21 28 recommendations, evaluations, or opinions of a peer review 21 29 team in a judicial, administrative, or arbitration proceeding. 21 30 11. A person is not liable as a result of an act, 21 31 omission, or decision made in connection with the person's 21 32 service in a peer review team, unless the act, omission, or 21 33 decision is made with actual malice. A person is not liable 21 34 as a result of providing information to a peer review team, or 21 35 for disclosure of privileged matter to a peer review team. 22 1 12. The costs of the peer review shall be paid by the 22 2 applicant. 22 3 Sec. 8. NEW SECTION. 542D.8 QUALIFICATIONS FOR AND 22 4 ISSUANCE OF A LICENSE AS AN ACCOUNTING PRACTITIONER. 22 5 1. An accounting practitioner license shall be issued by 22 6 the board to a person who is a resident of this state, has a 22 7 place of business in this state, or is regularly employed in 22 8 this state, who makes application on a form prescribed and 22 9 furnished by the board, passes a written examination 22 10 prescribed by the board, and meets one of the following 22 11 requirements: 22 12 a. Has two or more years of actual experience in the 22 13 practice of an accounting practitioner as an employee of a 22 14 certified public accountant or an accounting practitioner. 22 15 b. Submits evidence satisfactory to the board that the 22 16 applicant is a graduate of a four-year college or university 22 17 accredited by the north central accreditation association or 22 18 other regional accreditation association having equivalent 22 19 standards, with a major in accounting, or that the applicant 22 20 is a graduate in accountancy from a business or correspondence 22 21 school accredited by the accrediting commission for business 22 22 schools or the accrediting commission of the national home 22 23 study council. 22 24 c. Submits evidence of at least five years of continuous 22 25 experience engaged in performing any of the services set forth 22 26 in section 542D.3, subsection 1, on a full-time basis. 22 27 2. An applicant for a license to practice as an accounting 22 28 practitioner shall pay to the board an examination fee prior 22 29 to examination. The amount of the fee shall be set by the 22 30 board based upon the annual cost of administering the 22 31 examination. 22 32 3. An examination shall be conducted by the board as often 22 33 as deemed necessary, but not less than two times per year. 22 34 4. The examination shall be prescribed by the board and 22 35 shall be designed and given in a manner as to fairly test the 23 1 applicant's knowledge of accounting. The examination shall 23 2 not include questions relating to the subject of auditing. 23 3 5. The board, in its discretion, may use all or any part 23 4 of a standard or uniform examination and advisory grading 23 5 service that is provided or furnished by a national accounting 23 6 organization or society to assist the board in the performance 23 7 of its duties under this chapter. An examination in theory 23 8 shall be in writing and the identity of the person taking the 23 9 examination shall be concealed until after the examination 23 10 papers have been graded. 23 11 6. If an applicant has partially passed an examination 23 12 given in another state, under requirements that the board 23 13 finds to be substantially equivalent to those required in 23 14 examinations given in this state, the results of the other 23 15 state's examination shall be accepted as though given in this 23 16 state. 23 17 7. An applicant who successfully passes all subjects in 23 18 which examined shall be issued a license as an accounting 23 19 practitioner by the board. The cost of the license shall be 23 20 based upon the administrative costs of the board and the costs 23 21 of issuing the license. 23 22 8. An applicant who fails the examination once shall be 23 23 allowed to take the examination at the next scheduled time. 23 24 Thereafter, the applicant shall be allowed to take the 23 25 examination at the discretion of the board. An applicant who 23 26 passes a portion of the examination shall have the right to be 23 27 reexamined in the remaining subjects at a future examination, 23 28 and if the applicant passes in the remaining subjects, the 23 29 applicant shall be considered to have passed the entire 23 30 examination. An applicant who fails the examination may 23 31 request in writing information from the board concerning the 23 32 applicant's examination grade and subject areas or questions 23 33 which the applicant failed to answer correctly, except that if 23 34 the board administers a uniform, standardized examination, the 23 35 board shall only be required to provide the examination grade 24 1 and such other information concerning the applicant's 24 2 examination results which is available to the board. 24 3 9. A license as an accounting practitioner shall expire in 24 4 multiyear intervals as determined by the board. The board 24 5 shall notify a person licensed under this chapter of the date 24 6 of expiration of the license and the amount of the fee 24 7 required for its renewal. The notice shall be mailed at least 24 8 one month in advance of the expiration date. A person who 24 9 fails to renew a license to practice as an accounting 24 10 practitioner by the expiration date shall be allowed to do so 24 11 within thirty days following its expiration, but the board may 24 12 assess a reasonable penalty. A renewal of a license shall be 24 13 issued to a person licensed pursuant to this section or who 24 14 holds a license issued under the law of another state. 24 15 10. The board, in its discretion, may waive an examination 24 16 and issue a license as an accounting practitioner to an 24 17 applicant who satisfies either of the following: 24 18 a. The applicant holds, or is eligible to hold, an 24 19 accounting practitioner license issued, after examination, by 24 20 a state which extends by reciprocity similar privileges to an 24 21 accounting practitioner of this state, and who, as of the time 24 22 of issuance of the license, possessed the basic qualifications 24 23 set forth in subsection 1. 24 24 b. The applicant has passed the examination required under 24 25 the laws of another state and possesses the basic 24 26 qualifications set forth in subsection 1 at the time the 24 27 applicant applied for a license in this state. 24 28 11. A person applying for an accounting practitioner 24 29 license shall pay a fee as determined by the board based upon 24 30 the costs of issuing such licenses. 24 31 Sec. 9. NEW SECTION. 542D.9 APPOINTMENT OF SECRETARY OF 24 32 STATE AS AGENT. 24 33 Application for a certificate under section 542D.6, a 24 34 license under section 542D.8, or a permit to practice under 24 35 section 542D.7 by a person or a firm not a resident of this 25 1 state constitutes appointment of the secretary of state as the 25 2 applicant's agent upon whom process may be served in any 25 3 action or proceeding against the applicant arising out of a 25 4 transaction or operation connected with or incidental to 25 5 services performed by the applicant while a licensee within 25 6 this state. 25 7 Sec. 10. NEW SECTION. 542D.10 ENFORCEMENT AGAINST A 25 8 HOLDER OF A CERTIFICATE, PERMIT, OR LICENSE. 25 9 1. The board, after notice and hearing pursuant to section 25 10 542D.12, may revoke a certificate, permit, or license issued 25 11 under section 542D.6, 542D.7, or 542D.8, or revoke or limit 25 12 privileges under section 542D.20; suspend such certificate, 25 13 permit, or license, or refuse to renew such certificate, 25 14 permit, or license for a period of not more than five years; 25 15 reprimand, censure, or limit the scope of practice of any 25 16 licensee; impose an administrative penalty not to exceed one 25 17 thousand dollars, or place a licensee on probation, all with 25 18 or without terms, conditions, and limitations, for any one or 25 19 more of the following reasons: 25 20 a. Fraud or deceit in obtaining a certificate, permit, or 25 21 license. 25 22 b. Cancellation, revocation, suspension, or refusal to 25 23 renew a certificate, permit, or license or privileges under 25 24 section 542D.20 for disciplinary reasons in any other state 25 25 for any cause. 25 26 c. Failure, on the part of a holder of a certificate, 25 27 permit, or license, under section 542D.6, 542D.7, or 542D.8, 25 28 to maintain compliance with the requirements for issuance or 25 29 renewal of such certificate, permit, or license or to report 25 30 changes to the board under section 542D.6, subsection 6, or 25 31 section 542D.7, subsection 6. 25 32 d. Revocation or suspension of the right to practice 25 33 before any state or federal agency. 25 34 e. Dishonesty, fraud, or gross negligence in the 25 35 performance of services as a licensee or individual granted 26 1 privileges under section 542D.20, or in the filing or failure 26 2 to file the licensee's or individual's own income tax return. 26 3 f. Violation of this chapter or a rule adopted by the 26 4 board or violation of professional standards. 26 5 g. Violation of a rule of professional conduct adopted 26 6 pursuant to section 542D.4, subsection 9. 26 7 h. Conviction of a felony, or of any crime an element of 26 8 which is dishonesty or fraud, under the laws of the United 26 9 States, of this state, or of any other state or country if the 26 10 acts involved would have constituted a crime under the laws of 26 11 this state. 26 12 i. Performance of a fraudulent act while holding a 26 13 certificate, permit, or license issued under this chapter. 26 14 j. Conduct reflecting adversely upon the licensee's 26 15 fitness to perform services while a licensee or individual 26 16 granted privileges under section 542D.20. 26 17 k. Making a false or misleading statement or verification, 26 18 in support of an application for a certificate, permit, or 26 19 license filed by another person. 26 20 2. In lieu of or in addition to any enforcement action 26 21 specifically provided in subsection 1, the board may require 26 22 any of the following: 26 23 a. A peer review conducted in such fashion as the board 26 24 may specify. 26 25 b. Satisfactory completion of such continuing professional 26 26 education programs as the board may specify. 26 27 3. In a proceeding in which an enforcement action under 26 28 subsection 1 or 2 is imposed, the board may also require the 26 29 respondent licensee to pay the costs of the proceeding. 26 30 Sec. 11. NEW SECTION. 542D.11 ENFORCEMENT PROCEDURES – 26 31 INVESTIGATIONS. 26 32 1. The board, upon receipt of a complaint or other 26 33 information which indicates a violation of this chapter or of 26 34 a rule of the board, may conduct an investigation to determine 26 35 whether there is probable cause to institute a proceeding 27 1 under section 542D.12, 542D.13, or 542D.14 against a person or 27 2 firm for such violation. An investigation under this section 27 3 is not a prerequisite to instituting a proceeding if a 27 4 determination of probable cause can be made without 27 5 investigation. The board or the chairperson of the board may 27 6 issue subpoenas to compel witnesses to testify or to produce 27 7 evidence. 27 8 2. The board may designate a member of the board, or other 27 9 appropriate person, to serve as investigating officer to 27 10 conduct an investigation. Upon completion of an 27 11 investigation, the investigating officer shall file a report 27 12 with the board. The board shall make a finding of whether 27 13 probable cause exists based on the report, or return the 27 14 report to the investigating officer for further investigation. 27 15 Unless there has been a determination of probable cause, the 27 16 report of the investigating officer, the complaint, if any, 27 17 the testimony and documents submitted in support of the 27 18 complaint or gathered in the investigation, and the fact of 27 19 pendency of the investigation are confidential information and 27 20 shall not be disclosed to any person except law enforcement 27 21 authorities and, to the extent deemed necessary in order to 27 22 conduct the investigation, the subject of the investigation, 27 23 persons whose complaints are being investigated, and witnesses 27 24 questioned in the course of the investigation. 27 25 3. Upon a finding of probable cause, if the subject of the 27 26 investigation is a licensee or an individual granted 27 27 privileges under section 542D.20, the board shall direct that 27 28 a complaint be issued under section 542D.12, and if the 27 29 subject of the investigation is not a licensee or individual 27 30 granted privileges under section 542D.20, the board shall take 27 31 appropriate action under section 542D.15 or 542D.16. Upon a 27 32 finding of no probable cause, the board shall close the matter 27 33 and shall not release information relating to the 27 34 investigation and the finding of no probable cause without the 27 35 consent of the person or firm subject to the investigation. 28 1 4. The board may review the publicly available 28 2 professional work of a licensee or an individual granted 28 3 privileges under section 542D.20 on a general and random 28 4 basis, without any requirement of a formal complaint or 28 5 suspicion of impropriety. If, as a result of such review, the 28 6 board discovers reasonable grounds for an investigation, the 28 7 board may proceed as provided in this section. 28 8 Sec. 12. NEW SECTION. 542D.12 ENFORCEMENT PROCEDURES – 28 9 HEARINGS BY THE BOARD. 28 10 1. Upon a determination by the board that probable cause 28 11 exists with respect to a violation by a licensee or an 28 12 individual granted privileges under section 542D.20, whether 28 13 following an investigation under section 542D.11, upon receipt 28 14 of a written complaint furnishing grounds for a determination 28 15 of such probable cause, or upon receipt of notice of a 28 16 decision by the board of accountancy of another state 28 17 furnishing such grounds, the board shall issue a complaint 28 18 setting forth appropriate charges and set a date for hearing 28 19 before the board on the charges. The board, no less than 28 20 thirty days prior to the date of the hearing, shall serve a 28 21 copy of the complaint and notice of the time and place of the 28 22 hearing upon the licensee or an individual granted privileges 28 23 under section 542D.20, with a copy of the board's rules 28 24 governing the proceedings, either by personal delivery or by 28 25 certified mail to the licensee at the licensee's last known 28 26 address. With respect to an individual exercising privileges 28 27 under section 542D.20, service shall be by certified mail to 28 28 the individual's last known address, or pursuant to section 28 29 542D.20, subsection 1, paragraph "c", subparagraph (3). 28 30 2. A licensee or an individual granted privileges under 28 31 section 542D.20 against whom a complaint has been issued under 28 32 this section, reasonably in advance of the hearing, may 28 33 examine and copy the report of the investigation, if any, and 28 34 any documentary or testimonial evidence and summaries of 28 35 anticipated evidence in the board's possession relating to the 29 1 subject matter of the complaint. The board's rules governing 29 2 proceedings under this section shall specify the manner in 29 3 which such right may be exercised. 29 4 3. A respondent licensee or an individual granted 29 5 privileges under section 542D.20 may appear in person, or, in 29 6 the case of a firm, through a partner, officer, director, 29 7 shareholder, member, or manager, or by counsel; examine 29 8 witnesses and evidence presented in support of the complaint; 29 9 and present evidence and witnesses on the licensee's or an 29 10 individual's own behalf. The board, on application by a 29 11 licensee or an individual granted privileges under section 29 12 542D.20, shall issue subpoenas to compel the attendance of 29 13 witnesses and the production of documentary evidence on behalf 29 14 of the applicant. 29 15 4. Evidence supporting the complaint shall be presented by 29 16 the investigating officer, by a board member designated for 29 17 that purpose, or by counsel. A board member who presents 29 18 evidence, or who conducted the investigation of the matter 29 19 under section 542D.11, shall not participate in the board's 29 20 decision of the matter. 29 21 5. The board, in a hearing under this section, shall be 29 22 advised by counsel other than the counsel who presents or 29 23 assists in presenting the evidence supporting the complaint. 29 24 6. The board, in a hearing under this section, is not 29 25 bound by technical rules of evidence. 29 26 7. A stenographic or electronic record of a hearing held 29 27 under this section shall be made and filed with the board. A 29 28 transcript need not be prepared unless review is sought under 29 29 subsection 10 or the board determines that there is other good 29 30 cause for its preparation. 29 31 8. In a hearing held under this section a recorded vote of 29 32 a majority of all members of the board then in office, 29 33 excluding members disqualified under subsection 4, is required 29 34 to sustain a charge and to take appropriate action with 29 35 respect to the violation. 30 1 9. If, after service of a complaint and notice of hearing 30 2 as required under subsection 1, the respondent licensee or 30 3 individual granted privileges under section 542D.20 fails to 30 4 appear at the hearing, the board may proceed to hear evidence 30 5 against such person and may enter such order as it deems 30 6 warranted by the evidence. The order is final unless the 30 7 licensee or individual granted privileges under section 30 8 542D.20 petitions for review of the order under subsection 10. 30 9 Additionally, the board, upon a showing of good cause for the 30 10 failure to appear made within thirty days from the date of 30 11 such order, may set aside the order and schedule a new hearing 30 12 on the complaint. 30 13 10. A person or firm adversely affected by an order of the 30 14 board entered after a hearing under this section may obtain 30 15 review of the order by filing a written petition for review 30 16 with the district court within thirty days after the entry of 30 17 the order. The procedure for review and the scope of the 30 18 review is as provided in chapter 17A. 30 19 11. In a case where the board renders a decision imposing 30 20 a sanction against a licensee or an individual granted 30 21 privileges under section 542D.20, under this section and 30 22 section 542D.10 the board shall examine its records to 30 23 determine whether the licensee holds a certificate, permit, or 30 24 license in another state; and if so, the board shall notify 30 25 the board of accountancy of such other state of its decision, 30 26 by mail, within forty-five days of rendering the decision. 30 27 The board may also furnish information relating to a 30 28 proceeding resulting in disciplinary action to other public 30 29 authorities and to private professional organizations having a 30 30 disciplinary interest in the licensee. Where a petition for 30 31 review has been filed pursuant to subsection 10, notification 30 32 and furnishing of information as provided for in this 30 33 subsection shall not occur until the resolution of the review 30 34 and, if resolution is in favor of the petitioner, notification 30 35 or furnishing of information shall not be made. 31 1 Sec. 13. NEW SECTION. 542D.13 REINSTATEMENT. 31 2 1. If the board has suspended or revoked a certificate, 31 3 permit, or license, or revoked or limited privileges granted 31 4 under section 542D.20, or refused to renew a certificate, 31 5 permit, or license, the board, upon application in writing by 31 6 the person or firm affected and for good cause shown, may 31 7 modify the suspension, or reissue the certificate, permit, or 31 8 license or reinstate privileges granted under section 542D.20. 31 9 2. The board, by rule, shall specify the manner in which 31 10 such applications shall be made, the times within which they 31 11 shall be made, and the circumstances in which hearings will be 31 12 held on such applications. 31 13 3. Before reissuing or terminating the suspension of a 31 14 certificate, permit, or license under this section, or 31 15 reinstating privileges granted under section 542D.20, and as a 31 16 condition to such action, the board may require the applicant 31 17 to show successful completion of specified continuing 31 18 professional education. The board may also make such reissue, 31 19 termination, or reinstatement conditional and subject to 31 20 satisfactory completion of a peer review conducted as 31 21 specified by the board. 31 22 Sec. 14. NEW SECTION. 542D.14 UNLAWFUL ACTS. 31 23 1. Only a certified public accountant may issue a report 31 24 on financial statements of a person, firm, organization, or 31 25 governmental unit, or offer to render or render any attest 31 26 service. Only a certified public accountant or accounting 31 27 practitioner may render compilation services. This 31 28 restriction does not prohibit such acts by a public official 31 29 or public employee in the performance of that person's duties; 31 30 or prohibit the performance by any nonlicensee of other 31 31 services involving the use of accounting skills, including the 31 32 preparation of tax returns, management advisory services, and 31 33 the preparation of financial statements without the issuance 31 34 of reports on such financial statements. A nonlicensee may 31 35 prepare financial statements and issue nonattest transmittals 32 1 or information on such statements or transmittals which do not 32 2 purport to be in compliance with the statements on standards 32 3 for accounting and review services. 32 4 2. A licensee performing attest or compilation services 32 5 must provide those services consistent with professional 32 6 standards. 32 7 3. A person not holding a certificate shall not use or 32 8 assume the title "certified public accountant" or the 32 9 abbreviation "CPA" or any other title, designation, words, 32 10 letters, abbreviation, sign, card, or device tending to 32 11 indicate that such person is a certified public accountant. 32 12 4. A firm shall not provide attest services or assume or 32 13 use the title "certified public accountants" or the 32 14 abbreviation "CPAs" or any other title, designation, words, 32 15 letters, abbreviation, sign, card, or device tending to 32 16 indicate that such firm is a certified public accountant firm 32 17 unless the firm holds a permit issued under section 542D.7 and 32 18 ownership of the firm satisfies the requirements of this 32 19 chapter and rules adopted by the board. 32 20 5. A person shall not assume or use the title "accounting 32 21 practitioner" or the abbreviation "AP" or any other title, 32 22 designation, words, letters, abbreviation, sign, card, or 32 23 device tending to indicate that such person is an accounting 32 24 practitioner unless that person holds a license issued under 32 25 section 542D.8. 32 26 6. A firm not holding a permit issued under section 542D.7 32 27 shall not provide compilation services or assume or use the 32 28 title "accounting practitioner" the abbreviation "AP" or any 32 29 other title, designation, words, letters, abbreviation, sign, 32 30 card, or device tending to indicate that such firm is composed 32 31 of accounting practitioners. 32 32 7. A person or firm not holding a certificate, permit, or 32 33 license issued under section 542D.6, 542D.7, or 542D.8 shall 32 34 not assume or use the title "certified accountant", "chartered 32 35 accountant", "enrolled accountant", "licensed accountant", 33 1 "registered accountant", "accredited accountant", or any other 33 2 title or designation likely to be confused with the title 33 3 "certified public accountant" or "accounting practitioner", or 33 4 use any of the abbreviations "CA", "LA", "RA", "AA", or 33 5 similar abbreviation likely to be confused with the 33 6 abbreviation "CPA" or "AP". The title "enrolled agent" or 33 7 "EA" may only be used by individuals so designated by the 33 8 internal revenue service. 33 9 8. A nonlicensee shall not use language in any statement 33 10 relating to the financial affairs of a person or entity which 33 11 is conventionally used by licensees in reports on financial 33 12 statements. The board shall develop and issue language which 33 13 nonlicensees may use in connection with such financial 33 14 information. 33 15 9. A person or firm not holding a certificate, permit, or 33 16 license issued under section 542D.6, 542D.7, or 542D.8 shall 33 17 not assume or use any title or designation that includes the 33 18 word "accountant", "auditor", or "accounting", in connection 33 19 with any other language that implies that such person or firm 33 20 holds such a certificate, permit, or license or has special 33 21 competence as an accountant or auditor. However, this 33 22 subsection does not prohibit an officer, partner, member, 33 23 manager, or employee of a firm or organization from affixing 33 24 that person's own signature to a statement in reference to the 33 25 financial affairs of such firm or organization with wording 33 26 which designates the position, title, or office that the 33 27 person holds, or prohibit any act of a public official or 33 28 employee in the performance of such person's duties. 33 29 10. A person holding a certificate or license or firm 33 30 holding a permit under this chapter shall not use a 33 31 professional or firm name or designation that is misleading 33 32 about the legal form of the firm, or about the persons who are 33 33 partners, officers, members, managers, or shareholders of the 33 34 firm, or about any other matter. However, the name of one or 33 35 more former partners, members, managers, or shareholders may 34 1 be included in the name of a firm or its successor. 34 2 11. This section does not apply to a person or firm 34 3 holding a certification, designation, degree, or license 34 4 granted in a foreign country entitling the holder to engage in 34 5 the practice of public accountancy or its equivalent in such 34 6 country, whose activities in this state are limited to 34 7 providing professional services to a person or firm who is a 34 8 resident of, government of, or business entity of the country 34 9 in which the person holds such entitlement, who does not 34 10 perform attest or compilation services, and who does not issue 34 11 reports with respect to the financial statements of any other 34 12 person, firm, or governmental unit in this state, and who does 34 13 not use in this state any title or designation other than the 34 14 one under which the person practices in such country, followed 34 15 by a translation of such title or designation into the English 34 16 language, if it is in a different language, and by the name of 34 17 such country. 34 18 12. A holder of a certificate issued under section 542D.6 34 19 shall not perform attest services in a firm that does not hold 34 20 a permit issued under section 542D.7. 34 21 13. An individual licensee shall not issue a report in 34 22 standard form upon a compilation of financial information 34 23 through any form of business that does not hold a permit 34 24 issued under section 542D.7 unless the report discloses the 34 25 name of the business through which the individual is issuing 34 26 the report and the individual licensee does all of the 34 27 following: 34 28 a. Signs the compilation report identifying the individual 34 29 as a certified public accountant or accounting practitioner. 34 30 b. Meets competency requirements provided in applicable 34 31 standards. 34 32 c. Undergoes, no less frequently than once every three 34 33 years, a peer review conducted in a manner as specified by the 34 34 board. The review shall include verification that such 34 35 individual has met the competency requirements set out in 35 1 professional standards for such services. 35 2 14. This section does not prohibit a practicing attorney 35 3 from preparing or presenting records or documents customarily 35 4 prepared by an attorney in connection with the attorney's 35 5 professional work in the practice of law. 35 6 15. a. A licensee shall not for a commission recommend or 35 7 refer a client to any product or service, or for a commission 35 8 recommend or refer another person to any product or service to 35 9 be supplied by a client, or receive a commission, when the 35 10 licensee also performs for that client any of the following: 35 11 (1) An audit or review of a financial statement. 35 12 (2) A compilation of a financial statement when the 35 13 licensee expects, or reasonably might expect, that a third 35 14 party will use the financial statement and the licensee's 35 15 compilation report does not disclose a lack of independence. 35 16 (3) An examination of prospective financial information. 35 17 The prohibitions under this paragraph apply during the 35 18 period in which the licensee is engaged to perform any of the 35 19 services identified in subparagraphs (1) through (3), and the 35 20 period covered by any historical financial statements involved 35 21 in such services. 35 22 b. A licensee who is not prohibited by this section from 35 23 performing services for or receiving a commission and who is 35 24 paid or expects to be paid a commission shall disclose that 35 25 fact to any person or entity to whom the licensee recommends 35 26 or refers a product or service to which the commission 35 27 relates. 35 28 c. A licensee who accepts a referral fee for recommending 35 29 a service of a licensee or referring a licensee to any person 35 30 or entity or who pays a referral fee to obtain a client shall 35 31 disclose such acceptance or payment to the client. 35 32 16. a. A licensee shall not do any of the following: 35 33 (1) Perform professional services for a contingent fee, or 35 34 receive such fee from a client for whom the licensee or the 35 35 licensee's firm performs any of the following: 36 1 (a) An audit or review of a financial statement. 36 2 (b) A compilation of a financial statement when the 36 3 licensee expects, or reasonably might expect, that a third 36 4 party will use the financial statement and the licensee's 36 5 compilation report does not disclose a lack of independence. 36 6 (c) An examination of prospective financial information. 36 7 (2) Prepare for a client an original or amended tax return 36 8 or claim for a tax refund for a contingent fee. 36 9 b. Paragraph "a" applies during the period in which the 36 10 licensee is engaged to perform any of the listed services and 36 11 the period covered by any historical financial statements 36 12 involved in such listed services. 36 13 c. For purposes of this subsection, a contingent fee is a 36 14 fee established for the performance of a service pursuant to 36 15 an arrangement in which a fee will not be charged unless a 36 16 specified finding or result is attained, or in which the 36 17 amount of the fee is otherwise dependent upon the finding or 36 18 result of such service. A fee shall not be considered as 36 19 being a contingent fee if fixed by a court or other public 36 20 authority, or, in a tax matter, if determined based on the 36 21 results of a judicial proceeding or the findings of a 36 22 governmental agency. A licensee's fee may vary depending on 36 23 the complexity of the services rendered. 36 24 Sec. 15. NEW SECTION. 542D.15 INJUNCTION AGAINST 36 25 UNLAWFUL ACTS, CIVIL PENALTIES, AND CONSENT AGREEMENTS. 36 26 1. If, as a result of an investigation under section 36 27 542D.11 or otherwise, the board believes that a person or firm 36 28 has engaged, or is about to engage, in an act or practice 36 29 which constitutes or will constitute a violation of section 36 30 542D.14, the board may make application to the district court 36 31 for an order enjoining such act or practice. Upon a showing 36 32 by the board that such person or firm has engaged, or is about 36 33 to engage, in any such act or practice, an injunction, 36 34 restraining order, or other order as may be appropriate shall 36 35 be granted by the court. 37 1 2. In addition to a criminal penalty provided for in 37 2 section 542D.16, the board, by order, may impose a civil 37 3 penalty not to exceed one thousand dollars for each offense 37 4 upon a person who is not a licensee under this chapter and who 37 5 engages in conduct prohibited by section 542D.14. Each day of 37 6 a continued violation constitutes a separate offense. 37 7 3. The board, in determining the amount of a civil penalty 37 8 to be imposed, may consider any of the following: 37 9 a. Whether the amount imposed will be a substantial 37 10 economic deterrent to the violation. 37 11 b. The circumstances leading to the violation. 37 12 c. The severity of the violation and the risk of harm to 37 13 the public. 37 14 d. The economic benefits gained by the violator as a 37 15 result of noncompliance. 37 16 e. The interest of the public. 37 17 4. The board, before issuing an order under this section, 37 18 shall provide the person written notice and the opportunity to 37 19 request a hearing. The hearing must be requested within 37 20 thirty days after receipt of the notice and shall be conducted 37 21 in the same manner as provided for disciplinary proceedings 37 22 involving a licensee under this chapter. 37 23 5. The board, in connection with a proceeding under this 37 24 section, may issue subpoenas to compel the attendance and 37 25 testimony of witnesses and the disclosure of evidence, and may 37 26 request the attorney general to bring an action to enforce the 37 27 subpoena. 37 28 6. A person aggrieved by the imposition of a civil penalty 37 29 under this section may seek judicial review pursuant to 37 30 section 17A.19. 37 31 7. If a person fails to pay a civil penalty within thirty 37 32 days after entry of an order imposing the civil penalty, or if 37 33 the order is stayed pending an appeal, within ten days after 37 34 the court enters a final judgment in favor of the board, the 37 35 board shall notify the attorney general. The attorney general 38 1 shall commence an action to recover the amount of the penalty, 38 2 including reasonable attorney fees and costs. 38 3 8. An action to enforce an order under this section may be 38 4 joined with an action for an injunction. 38 5 9. The board, in its discretion and in lieu of prosecuting 38 6 a first offense under this section, may enter into a consent 38 7 agreement with a violator, or with a person guilty of aiding 38 8 or abetting a violator, which acknowledges the violation and 38 9 the violator's agreement to refrain from any further 38 10 violations. 38 11 Sec. 16. NEW SECTION. 542D.16 CRIMINAL PENALTIES. 38 12 1. A person who violates a provision of section 542D.14 is 38 13 guilty of a serious misdemeanor. 38 14 2. If the board has reason to believe that a person has 38 15 committed a violation subject to subsection 1, the board may 38 16 certify the facts to the attorney general of this state, or to 38 17 the county attorney of the county where the person maintains a 38 18 business office, who, in the attorney general's or county 38 19 attorney's discretion, may initiate an appropriate criminal 38 20 proceeding. 38 21 3. If, after an investigation under section 542D.11 or 38 22 otherwise, the board has reason to believe that a person or 38 23 firm has knowingly engaged in an act or practice that 38 24 constitutes a violation subject to subsection 1, the board may 38 25 submit its information to the attorney general of any state, 38 26 or other appropriate law enforcement official, who, in such 38 27 official's discretion, may initiate an appropriate criminal 38 28 proceeding. 38 29 Sec. 17. NEW SECTION. 542D.17 SINGLE ACT EVIDENCE OF 38 30 PRACTICE. 38 31 In an action brought under section 542D.12, 542D.15, or 38 32 542D.16, evidence of the commission of a single act prohibited 38 33 by this chapter is sufficient to justify a penalty, 38 34 injunction, restraining order, or conviction, without evidence 38 35 of a general course of conduct. 39 1 Sec. 18. NEW SECTION. 542D.18 CONFIDENTIAL 39 2 COMMUNICATIONS. 39 3 A licensee shall not voluntarily disclose information 39 4 communicated to the licensee by a client relating to and in 39 5 connection with services rendered to the client by the 39 6 licensee, except with the permission of the client, or an 39 7 heir, successor, or personal representative of the client. 39 8 Such information is deemed to be confidential. However, this 39 9 section shall not be construed as prohibiting the disclosure 39 10 of information required to be disclosed by the standards of 39 11 the public accounting profession in reporting on the 39 12 examination of financial statements or as prohibiting 39 13 disclosures in a court proceeding, in an investigation or 39 14 proceeding under section 542D.11 or 542D.12, in an ethical 39 15 investigation conducted by a private professional 39 16 organization, in the course of a peer review, to another 39 17 person active in the licensee's firm performing services for 39 18 that client on a need-to-know basis, or to persons associated 39 19 with the investigative entity who need this information for 39 20 the sole purpose of assuring quality control. 39 21 Sec. 19. NEW SECTION. 542D.19 LICENSEES' WORKING PAPERS 39 22 – CLIENTS' RECORDS. 39 23 1. Subject to section 542D.18, all statements, records, 39 24 schedules, working papers, and memoranda made by a licensee or 39 25 a partner, shareholder, officer, director, member, manager, or 39 26 employee of a licensee, incident to, or in the course of, 39 27 rendering services to a client, except reports submitted by 39 28 the licensee to the client and except for records that are 39 29 part of the client's records, are the property of the licensee 39 30 in the absence of an express agreement between the licensee 39 31 and the client to the contrary. Such statement, record, 39 32 schedule, working paper, or memorandum shall not be sold, 39 33 transferred, or bequeathed, without the consent of the client 39 34 or the client's personal representative or assignee, to anyone 39 35 other than a surviving partner, stockholder, or member of the 40 1 licensee, or any combined or merged firm or successor in 40 2 interest to the licensee. This section shall not be construed 40 3 as prohibiting a temporary transfer of working papers or other 40 4 material necessary in the course of carrying out peer reviews 40 5 or as otherwise interfering with the disclosure of information 40 6 pursuant to section 542D.18. 40 7 2. A licensee shall furnish to a client or former client, 40 8 upon request and reasonable notice, the following: 40 9 a. A copy of the licensee's working papers, to the extent 40 10 that such working papers include records that would ordinarily 40 11 constitute part of the client's records and are not otherwise 40 12 available to the client. 40 13 b. Accounting or other records belonging to, or obtained 40 14 from or on behalf of, the client that the licensee removed 40 15 from the client's premises or received for the client's 40 16 account. The licensee may make and retain copies of such 40 17 documents of the client when they form the basis for work done 40 18 by the licensee. 40 19 3. This chapter does not require a licensee to keep any 40 20 working papers beyond the period prescribed in any other 40 21 applicable statute. 40 22 Sec. 20. NEW SECTION. 542D.20 SUBSTANTIAL EQUIVALENCY. 40 23 1. a. An individual whose principal place of business is 40 24 not in this state having a certificate or license as a 40 25 certified public accountant from any state which the national 40 26 association of state boards of accountancy's national 40 27 qualification appraisal service has verified to be in 40 28 substantial equivalence with the certified public accountant 40 29 certification requirements of this chapter is presumed to have 40 30 qualifications substantially equivalent to this state's 40 31 requirements. Such individual shall have all the privileges 40 32 of certificate or permit holders of this state without the 40 33 need to obtain a certificate or permit under section 542D.6 or 40 34 542D.7. However, such individual shall notify the board of 40 35 the individual's intent to engage in acts as a certified 41 1 public accountant in this state under this section. 41 2 b. An individual whose principal place of business is not 41 3 in this state having a certificate or license as a certified 41 4 public accountant from any state which the national 41 5 association of state boards of accountancy's national 41 6 qualification appraisal service has not verified to be in 41 7 substantial equivalence with the certified public accountant 41 8 certification requirements of this chapter is presumed to have 41 9 qualifications substantially equivalent to this state's 41 10 requirements and shall have all the privileges of certificate 41 11 or permit holders of this state without the need to obtain a 41 12 certificate or permit under section 542D.6 or 542D.7 if such 41 13 individual obtains from the national association of state 41 14 boards of accountancy's national qualification appraisal 41 15 service verification that such individual's certified public 41 16 accountant qualifications are substantially equivalent to the 41 17 certified public accountant certification requirements of this 41 18 chapter. However, such individual shall notify the board of 41 19 the individual's intent to engage in acts as a certified 41 20 public accountant in this state under this section. 41 21 c. A licensee or permittee of another state exercising the 41 22 privilege afforded under this section, as a condition of the 41 23 grant of this privilege, consents to all of the following: 41 24 (1) The personal and subject matter jurisdiction of the 41 25 board. 41 26 (2) Compliance with this chapter and the board's rules. 41 27 (3) The appointment of the state board which issued the 41 28 licensee's license as the licensee's or permittee's agent upon 41 29 whom process may be served in any action or proceeding by the 41 30 Iowa accountancy examining board against the licensee or 41 31 permittee. 41 32 2. A licensee under this chapter offering or rendering 41 33 services or using a certified public accountant or accounting 41 34 practitioner title in another state is subject to disciplinary 41 35 action in this state for an act committed in another state for 42 1 which the licensee would be subject to discipline for the act 42 2 committed in the other state. Notwithstanding section 42 3 542D.11, subsection 1, the board is required to investigate 42 4 any complaint made by the board of accountancy of another 42 5 state. 42 6 Sec. 21. Section 15E.208, subsection 5, paragraph d, 42 7 subparagraph (4), Code Supplement 1999, is amended to read as 42 8 follows: 42 9 (4) The manner of oversight required by the department or 42 10 the auditor of state. The articles must provide that the 42 11 corporation shall submit a report to the governor, the general 42 12 assembly, and the department. The report shall provide a 42 13 description of the corporation's activities and a summary of 42 14 its finances, including financial awards. The report shall be 42 15 submitted not later than January 10 of each year. The 42 16 articles shall provide that an audit of the corporation must 42 17 be conducted each year for the preceding year by a certified 42 18 public accountant licensed pursuant to chapter542C542D. The 42 19 auditor of state may audit the books and accounts of the 42 20 corporation at any time. The results of the annual audit and 42 21 any audit for the current year conducted by the auditor of 42 22 state shall be included as part of the report. 42 23 Sec. 22. Section 99D.20, Code 1999, is amended to read as 42 24 follows: 42 25 99D.20 AUDIT OF LICENSEE OPERATIONS. 42 26 Within ninety days after the end of each race meet, the 42 27 licensee shall transmit to the commission an audit of the 42 28 financial transactions and condition of the licensee's 42 29 operations conducted under this chapter. Additionally, within 42 30 ninety days after the end of the licensee's fiscal year, the 42 31 licensee shall transmit to the commission an audit of the 42 32 financial transactions and condition of the licensee's total 42 33 operations. All audits shall be conducted by certified public 42 34 accountants registered in the state of Iowa under chapter542C42 35 542D. 43 1 Sec. 23. Section 99F.13, Code 1999, is amended to read as 43 2 follows: 43 3 99F.13 ANNUAL AUDIT OF LICENSEE OPERATIONS. 43 4 Within ninety days after the end of the licensee's fiscal 43 5 year, the licensee shall transmit to the commission an audit 43 6 of the financial transactions and condition of the licensee's 43 7 total operations. All audits shall be conducted by certified 43 8 public accountants registered or licensed in the state of Iowa 43 9 under chapter542C542D. 43 10 Sec. 24. Section 203.16, subsection 7, Code Supplement 43 11 1999, is amended to read as follows: 43 12 7. Where released at the request of the Iowa board of 43 13 accountancy for licensee review and discipline in accordance 43 14 with chapters 272C and542C542D and subject to the 43 15 confidentiality requirements of section 272C.6. 43 16 Sec. 25. Section 203C.24, subsection 7, Code Supplement 43 17 1999, is amended to read as follows: 43 18 7. Where released at the request of the Iowa board of 43 19 accountancy for licensee review and discipline in accordance 43 20 with chapters 272C and542C542D and subject to the 43 21 confidentiality requirements of section 272C.6. 43 22 Sec. 26. Section 272C.1, subsection 6, paragraph c, Code 43 23 1999, is amended to read as follows: 43 24 c. The Iowa accountancy examining board, created pursuant 43 25 to chapter542C542D. 43 26 Sec. 27. Section 272C.3, subsection 2, paragraph a, Code 43 27 1999, is amended to read as follows: 43 28 a. Revoke a license, or suspend a license either until 43 29 further order of the board or for a specified period, upon any 43 30 of the grounds specified in section 147.55, 148.6, 148B.7, 43 31 153.34, 154A.24, 169.13, 542B.21,542C.21542D.10, 543B.29, 43 32 544A.13, 544B.15, or 602.3203 or chapter 151, 155, 507B or 43 33 522, as applicable, or upon any other grounds specifically 43 34 provided for in this chapter for revocation of the license of 43 35 a licensee subject to the jurisdiction of that board, or upon 44 1 failure of the licensee to comply with a decision of the board 44 2 imposing licensee discipline; 44 3 Sec. 28. Section 272C.4, subsection 6, Code 1999, is 44 4 amended to read as follows: 44 5 6. Define by rule acts or omissions which are grounds for 44 6 revocation or suspension of a license under section 147.55, 44 7 148.6, 148B.7, 153.34, 154A.24, 169.13, 455B.191, 542B.21, 44 8542C.21542D.10, 543B.29, 544A.13, 544B.15, or 602.3203 or 44 9 chapter 151, 155, 507B or 522, as applicable, and to define by 44 10 rule acts or omissions which constitute negligence, careless 44 11 acts or omissions within the meaning of section 272C.3, 44 12 subsection 2, paragraph "b", which licensees are required to 44 13 report to the board pursuant to section 272C.9, subsection 2; 44 14 Sec. 29. Section 272C.5, subsection 2, paragraph c, Code 44 15 1999, is amended to read as follows: 44 16 c. Shall state whether the procedures are an alternative 44 17 to or an addition to the procedures stated in sections 147.58 44 18 to 147.71, 148.6 to 148.9, 153.23 to 153.30, 153.33, and 44 19 154A.23, 542B.22,542C.23542D.11, 543B.35, 543B.36, 544B.16. 44 20 Sec. 30. Section 272C.6, subsection 6, unnumbered 44 21 paragraph 1, Code 1999, is amended to read as follows: 44 22 A board created pursuant to chapter 147, 154A, 155, 169, 44 23 542B,542C542D, 543B, 543D, 544A, or 544B may charge a fee 44 24 not to exceed seventy-five dollars for conducting a 44 25 disciplinary hearing pursuant to this chapter which results in 44 26 disciplinary action taken against the licensee by the board, 44 27 and in addition to the fee, may recover from a licensee the 44 28 costs for the following procedures and associated personnel: 44 29 Sec. 31. Section 272C.9, subsection 2, Code 1999, is 44 30 amended to read as follows: 44 31 2. A licensee has a continuing duty to report to the 44 32 licensing board by whom the person is licensed those acts or 44 33 omissions specified by rule of the board pursuant to section 44 34 272C.4, subsection 6, when committed by another person 44 35 licensed by the same licensing board. This subsection does 45 1 not apply to licensees under chapter542C542D when the 45 2 observations are a result of participation in programs of 45 3 practice review, peer review and quality review conducted by 45 4 professional organizations of certified public accountants, 45 5 for educational purposes and approved by the accountancy 45 6 examining board. 45 7 Sec. 32. Section 502.102, subsection 11, paragraph c, 45 8 subparagraphs (3) and (4), Code Supplement 1999, are amended 45 9 to read as follows: 45 10 (3) An attorney licensed to practice law in this state, a 45 11 certified public accountant licensed pursuant to chapter542C45 12 542D, a professional engineer licensed pursuant to chapter 45 13 542B, or a certified teacher, if the person's performance of 45 14 these services is solely incidental to the practice of the 45 15 person's profession. 45 16 (4) An attorney licensed to practice law in this state or 45 17 a certified public accountant licensed pursuant to chapter 45 18542C542D who does not do any of the following: 45 19 Sec. 33. Section 522.1, subsection 2, Code 1999, is 45 20 amended to read as follows: 45 21 2. A certified public accountant licensed pursuant to 45 22 chapter542C542D. 45 23 Sec. 34. Section 546.10, subsection 1, paragraph b, Code 45 24 1999, is amended to read as follows: 45 25 b. The Iowa accountancy examining board created pursuant 45 26 to chapter542C542D. 45 27 Sec. 35. Section 546.10, subsection 5, Code 1999, is 45 28 amended to read as follows: 45 29 5. Fees collected under chapters 542B,542C542D, 543B, 45 30 543D, 544A, and 544B shall be paid to the treasurer of state 45 31 and credited to the general fund of the state. All expenses 45 32 required in the discharge of the duties and responsibilities 45 33 imposed upon the professional licensing division of the 45 34 department of commerce, the administrator, and the licensing 45 35 boards by the laws of this state shall be paid from moneys 46 1 appropriated by the general assembly for those purposes. All 46 2 fees deposited into the general fund of the state, as provided 46 3 in this subsection, shall be subject to the requirements of 46 4 section 8.60. 46 5 Sec. 36. Section 669.14, subsection 11, unnumbered 46 6 paragraph 1, Code 1999, is amended to read as follows: 46 7 Any claim for financial loss based upon an act or omission 46 8 in financial regulation, including but not limited to 46 9 examinations, inspections, audits, or other financial 46 10 oversight responsibilities, pursuant to chapters 87, 203, 46 11 203A, 203C, 203D, 421B, 486, 487, and 490 through 553, 46 12 excluding chapters 540A, 542B,542C542D, 543B, 543C, 543D, 46 13 544A, and 544B. 46 14 Sec. 37. Chapter 542C, Code 1999, is repealed, effective 46 15 July 1, 2001. However, this Act shall not be construed to 46 16 invalidate or affect any action taken or any proceeding 46 17 instituted under any law in effect prior to the effective date 46 18 of this Act. 46 19 Sec. 38. EFFECTIVE DATE. This Act takes effect July 1, 46 20 2001. 46 21 EXPLANATION 46 22 This bill creates a new Code chapter 542D, which 46 23 establishes certification, permitting, and licensure 46 24 requirements for accounting professionals in this state. The 46 25 bill repeals existing requirements contained in current Code 46 26 chapter 542C. The bill is based on model legislation 46 27 developed jointly by the American institute of certified 46 28 public accountants and the national association of state 46 29 boards of accountancy. 46 30 New Code section 542D.1 sets forth the title of the new 46 31 Code chapter as the "Iowa Accountancy Act of 2000". 46 32 New Code section 542D.2 sets forth a statement of 46 33 legislative intent which is to promote the reliability of 46 34 information that is used for guidance in financial 46 35 transactions or for accounting for or assessing the financial 47 1 status or performance of commercial, noncommercial, and 47 2 governmental enterprises. 47 3 New Code section 542D.3 establishes the definitions of 47 4 terms used in the Code chapter. 47 5 New Code section 542D.4 establishes the accountancy 47 6 examining board in a manner similar to current Code chapter 47 7 542C. 47 8 New Code section 542D.5 sets forth the qualifications 47 9 required to be met to be issued a certificate as a certified 47 10 public accountant. The Code section requires that an 47 11 applicant be of good moral character and meet established 47 12 education, experience, and examination requirements. 47 13 New Code section 542D.6 establishes the process of 47 14 application for an initial certificate as a certified public 47 15 accountant, as well as for renewal and reciprocal issuance of 47 16 certificates. This section requires that a licensee shall 47 17 participate in a program of professional education designed to 47 18 ensure continuing competence. 47 19 New Code section 542D.7 provides for a simple majority of 47 20 permit holders or licensees to comprise ownership of a 47 21 certified public accountant or accounting practitioner firm 47 22 while prohibiting passive ownership. This Code section also 47 23 continues peer review requirements for certified public 47 24 accountant firms performing the attest function. 47 25 New Code section 542D.8 sets forth the qualifications to be 47 26 met in order to be issued a license as an accounting 47 27 practitioner. This Code section establishes the process of 47 28 application for the initial license, as well as license 47 29 renewal. 47 30 New Code section 542D.9 establishes that an application for 47 31 a certificate, permit, or license to practice by a person or a 47 32 firm not a resident of the state constitutes appointment of 47 33 the secretary of state as the applicant's agent upon whom 47 34 process may be served in any action or proceeding against the 47 35 applicant arising out of any transaction or operation 48 1 connected with or incidental to services performed by the 48 2 applicant within this state. 48 3 New Code section 542D.10 provides for enforcement of the 48 4 Code chapter. The Code section identifies those acts of an 48 5 individual that may result in revocation, suspension, or other 48 6 limitation of the individual's certificate, permit, license, 48 7 or privileges under the Code chapter. The Code section also 48 8 provides for an administrative penalty not to exceed $1,000. 48 9 New Code section 542D.11 establishes enforcement and 48 10 investigative procedures of the board. 48 11 New Code section 542D.12 provides for a complaint to be 48 12 issued by the board and for hearing procedures. 48 13 New Code section 542D.13 provides for the reinstatement 48 14 procedures for a certificate, permit, or license which has 48 15 been suspended or revoked, and for the reinstatement of 48 16 revoked or limited privileges. 48 17 New Code section 542D.14 provides for the use of titles and 48 18 the scope of services that a licensee, firm, or nonlicensee 48 19 may perform under the new Code chapter. This Code section 48 20 also provides for the regulation of commission-based services 48 21 and contingent fee services. Prohibited acts are delineated. 48 22 New Code section 542D.15 grants authority to the 48 23 accountancy examining board to obtain injunctive relief from a 48 24 court if the board finds that any person or firm has engaged, 48 25 or is about to engage, in any acts or practices which will 48 26 constitute a violation of the new Code chapter. The new Code 48 27 section also provides for the levying of civil penalties and 48 28 the issuance of consent orders. 48 29 New Code section 542D.16 establishes a criminal penalty for 48 30 a violation of new Code section 542D.14, relating to unlawful 48 31 acts. A person who commits such violation is guilty of a 48 32 serious misdemeanor. 48 33 New Code section 542D.17 provides that in any action 48 34 brought to enforce the chapter, evidence of the commission of 48 35 a single prohibited act is sufficient to justify a penalty, 49 1 injunction, restraining order, or conviction, without evidence 49 2 of a general course of conduct. 49 3 New Code section 542D.18 defines the confidentiality of 49 4 client communications to accountants. The new Code section 49 5 establishes certain instances where such communications may be 49 6 disclosed. 49 7 New Code section 542D.19 provides for the retention and 49 8 management of client records. 49 9 New Code section 542D.20 provides for reciprocity and 49 10 discipline for certificate and license holders and permitted 49 11 firms from states whose accountancy statues are substantially 49 12 equivalent to the requirements of this new Code chapter. 49 13 Sections 21 through 36 of the bill make conforming changes 49 14 relating to the repeal of Code chapter 542C and the creation 49 15 of Code chapter 542D in this bill. 49 16 Section 37 of the bill provides for the repeal of existing 49 17 Code chapter 542C, relating to the regulation of public 49 18 accountancy, which was originally enacted in 1974. 49 19 Section 38 of the bill provides that the bill takes effect 49 20 on July 1, 2001. 49 21 LSB 5121HC 78 49 22 mj/cf/24
Text: HSB00657 Text: HSB00659 Text: HSB00600 - HSB00699 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
© 2000 Cornell College and League of Women Voters of Iowa
Comments about this site or page?
webmaster@legis.iowa.gov.
Please remember that the person listed above does not vote on bills. Direct all comments concerning legislation to State Legislators.
Last update: Thu Feb 10 03:35:35 CST 2000
URL: /DOCS/GA/78GA/Legislation/HSB/00600/HSB00658/000209.html
jhf