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Senate File 2415

Partial Bill History

Bill Text

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.  "Professional services" means services performed in
  4 18 the practice of public accounting which includes but, is not
  4 19 limited to, the performance or the offering to perform, by a
  4 20 person holding oneself out to the public as a certified public
  4 21 accountant, one or more kinds of services involving the use of
  4 22 accounting, attest, or auditing skills, including the issuance
  4 23 of reports on financial statements, or of one or more kinds of
  4 24 management advisory, financial advisory, or consulting
  4 25 services, or the preparation of tax returns or the furnishing
  4 26 of advice on tax matters.
  4 27    21.  "Report", when used with reference to financial
  4 28 statements, means a report, opinion, or other form of a
  4 29 writing that states or implies assurance as to the reliability
  4 30 of any financial statements and that includes or is
  4 31 accompanied by a statement or implication that the person or
  4 32 firm issuing the report has special knowledge or competence in
  4 33 accounting or auditing.  Such statement or implication of
  4 34 special knowledge or competence may arise from use by the
  4 35 issuer of the report of names or titles indicating that the
  5  1 person or firm is an accountant or auditor, or from the
  5  2 language of the report itself.  "Report" includes any form of
  5  3 language which disclaims an opinion when such form of language
  5  4 is conventionally understood to imply a positive assurance as
  5  5 to the reliability of the financial statements referred to or
  5  6 special knowledge or competence on the part of the person or
  5  7 firm issuing the language, and any other form of language that
  5  8 is conventionally understood to imply such assurance or such
  5  9 special knowledge or competence.
  5 10    22.  "State" means a state of the United States, the
  5 11 District of Columbia, Puerto Rico, the United States Virgin
  5 12 Islands, or Guam.
  5 13    23.  "Substantial equivalency" is a determination by the
  5 14 board or its designee that the education, examination, and
  5 15 experience requirements contained in the statutes and
  5 16 administrative rules of another jurisdiction are comparable
  5 17 to, or exceed, the education, examination, and experience
  5 18 requirements contained in this chapter or that an individual
  5 19 certified public accountant's education, examination, and
  5 20 experience qualifications are comparable to or exceed the
  5 21 education, examination, and experience requirements contained
  5 22 in this chapter.
  5 23    Sec. 4.  NEW SECTION.  542D.4  IOWA ACCOUNTANCY EXAMINING
  5 24 BOARD.
  5 25    1.  An Iowa accountancy examining board is created within
  5 26 the professional licensing and regulation division of the
  5 27 department of commerce to administer and enforce this chapter.
  5 28 The board shall consist of eight members, appointed by the
  5 29 governor and subject to senate confirmation, all of whom shall
  5 30 be residents of this state.  Five of the eight members shall
  5 31 be holders of certificates issued under section 542D.6, one
  5 32 member shall be the holder of a license issued under section
  5 33 542D.8, and two shall not be certified public accountants or
  5 34 licensed accounting practitioners and shall represent the
  5 35 general public.  Professional associations or societies
  6  1 composed of certified public accountants or licensed
  6  2 accounting practitioners may recommend the names of potential
  6  3 board members to the governor.  However, the governor is not
  6  4 bound by the recommendations.  A board member is not required
  6  5 to be a member of any professional association or society
  6  6 composed of certified public accountants or licensed
  6  7 accounting practitioners.  The term of each member of the
  6  8 board shall be three years, as designated by the governor, and
  6  9 appointments to the board are subject to the requirements of
  6 10 sections 69.16, 69.16A, and 69.19.  Members of the board
  6 11 appointed and serving pursuant to chapter 542C, Code 2001, on
  6 12 the effective date of this Act shall serve out the terms for
  6 13 which they were appointed.  Vacancies occurring during a term
  6 14 shall be filled by appointment by the governor for the
  6 15 unexpired term.  Upon the expiration of the member's term of
  6 16 office, a member shall continue to serve until a successor
  6 17 shall have been appointed and taken office.  Any member of the
  6 18 board whose certificate under section 542D.6 is revoked or
  6 19 suspended shall automatically cease to be a member of the
  6 20 board, and the governor may, after a hearing, remove any
  6 21 member of the board for neglect of duty or other just cause.
  6 22 A person who has served three successive complete terms shall
  6 23 not be eligible for reappointment, but appointment to fill an
  6 24 unexpired term shall not be considered a complete term for
  6 25 this purpose.
  6 26    2.  The board shall elect annually from among its members a
  6 27 chairperson and such other officers as the board may determine
  6 28 to be appropriate.  The board shall meet at such times and
  6 29 places as may be fixed by the board.  Meetings of the board
  6 30 shall be open to the public except insofar as they are
  6 31 concerned with investigations under section 542D.11 and except
  6 32 as may be necessary to protect information that is required to
  6 33 be kept confidential by the laws of this state.  A majority of
  6 34 the board members in office shall constitute a quorum at any
  6 35 meeting.  The board shall retain or arrange for the retention
  7  1 of all applications and all documents under oath that are
  7  2 filed with the board and also records of its proceedings, and
  7  3 the board shall maintain a registry of the names and addresses
  7  4 of all licensees and permittees under this chapter.  In any
  7  5 proceeding in court, civil or criminal, arising out of or
  7  6 founded upon any provision of this chapter, copies of any
  7  7 records certified as true copies under the seal of the board
  7  8 shall be admissible in evidence as tending to prove the
  7  9 contents of the records.
  7 10    3.  Members of the board are entitled to receive a per diem
  7 11 as specified in section 7E.6 for each day spent on performance
  7 12 of duties as members and shall be reimbursed for all actual
  7 13 and necessary expenses incurred in the performance of duties
  7 14 as members.
  7 15    4.  All moneys collected by the board from fees authorized
  7 16 to be charged by this chapter shall be received and accounted
  7 17 for by the board and shall be paid monthly to the treasurer of
  7 18 state for deposit in the general fund of the state.  Expenses
  7 19 of administering this chapter shall be paid from
  7 20 appropriations made by the general assembly, which expenses
  7 21 may include, but shall not be limited to, the costs of
  7 22 conducting investigations and of taking testimony and
  7 23 procuring the attendance of witnesses before the board or its
  7 24 committees; all legal proceedings taken under this chapter for
  7 25 the enforcement of this chapter; and educational programs for
  7 26 the benefit of the public and licensees and their employees.
  7 27    5.  A member of the board shall maintain the
  7 28 confidentiality of information relating to the following:
  7 29    a.  Criminal history or prior misconduct of the applicant.
  7 30    b.  Information relating to the contents of the
  7 31 examination.
  7 32    c.  Information relating to the examination results other
  7 33 than final score except for information about the results of
  7 34 the examination given to the person examined.
  7 35    A member of the board who willfully communicates or seeks
  8  1 to communicate such information in a manner which violates
  8  2 confidentiality requirements, and any person who willfully
  8  3 requests, obtains, or seeks to obtain such information, is
  8  4 guilty of a simple misdemeanor.
  8  5    6.  The board may employ an executive secretary and such
  8  6 other personnel as it deems necessary in its administration
  8  7 and enforcement of this chapter.  The board may appoint
  8  8 committees or persons to advise or assist the board in such
  8  9 administration and enforcement as the board sees fit.  The
  8 10 board may retain its own counsel to advise and assist it in
  8 11 addition to such advice and assistance as is provided by the
  8 12 attorney general, notwithstanding section 13.7.
  8 13    7.  The board may join professional organizations and
  8 14 associations to promote the improvement of the standards of
  8 15 practice of accountancy and for the protection and welfare of
  8 16 the public.
  8 17    8.  The board shall have the power to take all action that
  8 18 is necessary and proper to effectuate the purposes of this
  8 19 chapter, including the power to sue and be sued in its
  8 20 official name as an agency of this state.   The board shall
  8 21 also have the power to issue subpoenas to compel the
  8 22 attendance of witnesses and the production of documents; to
  8 23 administer oaths; to take testimony; to cooperate with the
  8 24 appropriate authorities in other states in investigation and
  8 25 enforcement concerning violations of this chapter and
  8 26 comparable statutes of other states; and to receive evidence
  8 27 concerning all matters within the scope of this chapter.  In
  8 28 case of disobedience of a subpoena, the board may invoke the
  8 29 aid of any district court in requiring the attendance and
  8 30 testimony of witnesses and the production of documentary
  8 31 evidence.  The board, its members, and its agents shall be
  8 32 immune from personal liability for actions taken in good faith
  8 33 in the discharge of the board's responsibilities, and the
  8 34 state shall hold the board, its members, and its agents
  8 35 harmless from all costs, damages, and attorney fees arising
  9  1 from claims and suits against them with respect to matters to
  9  2 which such immunity applies.
  9  3    9.  The board shall adopt rules pursuant to chapter 17A
  9  4 governing the administration and enforcement of this chapter
  9  5 and the conduct of licensees and permittees.  Rules adopted
  9  6 shall include, but not be limited to, the following:
  9  7    a.  Rules governing the board's meetings and the conduct of
  9  8 its business.
  9  9    b.  Rules of procedure governing the conduct of
  9 10 investigations and hearings by the board.
  9 11    c.  Rules specifying the educational and experience
  9 12 qualifications required for the issuance of a certificate
  9 13 under section 542D.6 and the continuing professional education
  9 14 required for renewal of a certificate under section 542D.6.
  9 15    d.  Rules specifying the educational and experience
  9 16 qualifications required for the issuance of a license under
  9 17 section 542D.8 and the continuing professional education
  9 18 required for renewal of a license under section 542D.6.
  9 19    e.  Rules of professional conduct directed to control the
  9 20 quality and probity of services provided by a licensee, and,
  9 21 among other areas, pertaining to a licensee's independence,
  9 22 integrity, and objectivity; competence and technical
  9 23 standards; responsibilities to the public; and
  9 24 responsibilities to a client.
  9 25    f.  Rules governing the professional standards applicable
  9 26 to a licensee.
  9 27    g.  Rules governing the manner and circumstances of use of
  9 28 the titles "certified public accountant" and "CPA".
  9 29    h.  Rules governing the manner and circumstances of use of
  9 30 the titles "accounting practitioner" and "AP".
  9 31    i.  Rules regarding peer review that may be required to be
  9 32 performed under this chapter.
  9 33    j.  Rules on substantial equivalence under section 542D.19.
  9 34    k.  Such other rules as the board deems necessary or
  9 35 appropriate for administering this chapter, including, but not
 10  1 limited to, rules of professional conduct, pertaining to
 10  2 corporations or limited liability companies practicing
 10  3 accounting, which the board deems consistent with or required
 10  4 by the public welfare.  The board may adopt rules governing
 10  5 the style, name, and title of corporations and limited
 10  6 liability companies and governing the affiliation of
 10  7 corporations and limited liability companies with other
 10  8 organizations.
 10  9    Sec. 5.  NEW SECTION.  542D.5  QUALIFICATIONS FOR A
 10 10 CERTIFICATE AS A CERTIFIED PUBLIC ACCOUNTANT.
 10 11    1.  A certificate as a certified public accountant shall be
 10 12 issued to a person of good moral character who meets the
 10 13 education, examination, and experience requirements of this
 10 14 section and who makes application pursuant to section 542D.6.
 10 15    2.  For purposes of this section, "good moral character"
 10 16 means lack of a history of dishonest or felonious acts.  The
 10 17 board may refuse to issue a certificate on the ground of
 10 18 failure to satisfy this requirement only if there is a
 10 19 substantial connection between the lack of good moral
 10 20 character of the applicant and the professional
 10 21 responsibilities of a licensee and if the finding by the board
 10 22 of lack of good moral character is supported by clear and
 10 23 convincing evidence.  If an applicant is found to be
 10 24 unqualified for a certificate because of a lack of good moral
 10 25 character, the board shall furnish the applicant a statement
 10 26 containing the findings of the board, a complete record of the
 10 27 evidence upon which the determination was based, and a notice
 10 28 of the applicant's right of appeal.
 10 29    3.  The education requirement for a certificate is as
 10 30 follows:
 10 31    a.  On or before December 31, 2000, the applicant has
 10 32 attained either of the following:
 10 33    (1)  A baccalaureate degree conferred by a college or
 10 34 university recognized by the board, in addition to one of the
 10 35 following:
 11  1    (a)  A concentration in accounting, or what the board
 11  2 determines to be substantially equivalent.
 11  3    (b)  A nonaccounting concentration, supplemented by what
 11  4 the board determines to be substantially the equivalent of an
 11  5 accounting concentration, including related courses in other
 11  6 areas of business administration.
 11  7    (2)  A graduate of a high school having at least a four-
 11  8 year course of study or its equivalent as determined by the
 11  9 board and no less than three years of continuous experience
 11 10 under the direct supervision of a certified public accountant
 11 11 holding a certificate to practice, which experience shall
 11 12 include a significant amount of accounting work involving
 11 13 third-party reliance on financial statements.
 11 14    b.  On or after January 1, 2001, the applicant completes at
 11 15 least one hundred fifty semester hours, or the trimester or
 11 16 quarter equivalent of one hundred fifty semester hours, of
 11 17 college education, and receives a baccalaureate or higher
 11 18 degree conferred by a college or university recognized by the
 11 19 board, the total educational program to include a
 11 20 concentration in accounting or what the board determines to be
 11 21 substantially equivalent.  Except as otherwise provided under
 11 22 this section, a person who has partially passed the
 11 23 examination required by section 542D.8, subsection 3, by
 11 24 passing one or more subjects prior to December 31, 2000, has
 11 25 until December 31, 2003, to successfully complete the
 11 26 examination process and qualify for a certificate under the
 11 27 educational requirements in effect prior to December 31, 2000.
 11 28    4.  The examination under section 542D.8, subsection 3,
 11 29 shall be offered at least twice a year, and shall test the
 11 30 applicant's knowledge of the subjects of accounting and
 11 31 auditing, and such other related subjects as the board may
 11 32 specify by rule, including but not limited to business law and
 11 33 taxation.  The examination shall be held at a time determined
 11 34 by the board and may be changed from time to time.  The board
 11 35 shall prescribe by rule the methods of applying for and
 12  1 conducting the examination, including methods for grading and
 12  2 determining a passing grade required of an applicant for a
 12  3 certificate.  However, the board, to the extent possible,
 12  4 shall ensure the examination, grading of the examination, and
 12  5 the passing grades are uniform with those applicable in all
 12  6 other states.  The board may make such use of all or any part
 12  7 of the uniform certified public accountant examination and
 12  8 advisory grading service of the American institute of
 12  9 certified public accountants, and may contract with third
 12 10 parties to perform such administrative services with respect
 12 11 to the examination as it deems appropriate to perform the
 12 12 duties of the board with respect to examination.
 12 13    5.  The board may admit to the examination a candidate who
 12 14 will complete the educational requirements for a baccalaureate
 12 15 degree within one hundred twenty days immediately following
 12 16 the date of the examination or who has completed those
 12 17 requirements.  However, the board shall not report the results
 12 18 of the examination until the candidate has met the educational
 12 19 requirements for a baccalaureate degree and shall not issue
 12 20 the certificate until the candidate has fully satisfied the
 12 21 requirements of subsection 3.
 12 22    6.  An applicant who has failed the examination may request
 12 23 in writing information from the board concerning the
 12 24 applicant's examination grade and subject areas or questions
 12 25 which the applicant failed to answer correctly, except that if
 12 26 the board administers a uniform, standardized examination, the
 12 27 board shall only be required to provide the examination grade
 12 28 and such other information concerning the applicant's
 12 29 examination results which are available to the board.
 12 30    7.  The board, by rule, may establish an examination fee to
 12 31 be charged each applicant by the board or by a third party
 12 32 administering the examination.
 12 33    8.  An applicant for initial issuance of a certificate must
 12 34 have no less than one year of experience.  The experience
 12 35 shall include providing any type of service or advice
 13  1 involving the use of accounting, attest, compilation,
 13  2 management advisory, financial advisory, tax, or consulting
 13  3 skills, as verified by a licensee, meeting requirements
 13  4 prescribed by the board by rule.  The experience is acceptable
 13  5 if it was gained through employment in government, industry,
 13  6 academia, or public practice.
 13  7    9.  A person holding a certificate as a certified public
 13  8 accountant issued by the state prior to July 1, 2001, is
 13  9 deemed to have met the requirements of this section.
 13 10    Sec. 6.  NEW SECTION.  542D.6  ISSUANCE AND RENEWAL OF
 13 11 CERTIFICATES – MAINTENANCE OF COMPETENCY.
 13 12    1.  a.  The board shall issue or renew a certificate to a
 13 13 person who makes application on a form prescribed and
 13 14 furnished by the board and who demonstrates either of the
 13 15 following:
 13 16    (1)  That the person's qualifications, including where
 13 17 applicable the qualifications prescribed by section 542D.5,
 13 18 satisfy the requirements of this section.
 13 19    (2)  That the person is eligible under the substantial
 13 20 equivalency standard provided for under section 542D.19,
 13 21 subsection 1, paragraph "a" or "b", which requires licensure
 13 22 for a certified public accountant who establishes a principal
 13 23 place of business in another state.
 13 24    b.  The holder of a certificate issued under this section
 13 25 shall only provide attest services in a certified public
 13 26 accountant firm that is issued a permit under section 542D.7.
 13 27    2.  A certificate shall be initially issued, and renewed,
 13 28 for a period of not more than three years, but in any event
 13 29 shall expire on June 30 of the year of expiration.  An
 13 30 application for a certificate shall be made in such form, and
 13 31 in the case of an application for renewal, between such dates,
 13 32 as the board shall specify by rule, and the board shall grant
 13 33 or deny such application within thirty days after the
 13 34 application is filed in proper form.  If the applicant seeks
 13 35 the opportunity to show that issuance or renewal of a
 14  1 certificate was mistakenly denied, or the board is not able to
 14  2 determine whether the application should be granted or denied,
 14  3 the board may issue to the applicant a provisional certificate
 14  4 which shall expire ninety days after its issuance or when the
 14  5 board determines whether or not to issue or renew the
 14  6 certificate for which application was made, whichever occurs
 14  7 first.
 14  8    3.  a.  An applicant who does not qualify for reciprocity
 14  9 under the substantial equivalency standard established in
 14 10 section 542D.19, subsection 1, paragraph "b", shall be issued
 14 11 a certificate by the board if the applicant is a holder of a
 14 12 certificate, license, or permit issued by another state, and
 14 13 shows all of the following:
 14 14    (1)  The applicant passed the examination required for
 14 15 issuance of the applicant's certificate with grades that would
 14 16 have been passing grades at the time in this state.
 14 17    (2)  The applicant has four years of experience outside of
 14 18 this state which includes the type of service or advice that
 14 19 satisfies the requirements of section 542D.5, subsection 8, or
 14 20 meets equivalent requirements prescribed by the board by rule,
 14 21 after passing the examination upon which the applicant's
 14 22 certificate was based and within the ten years immediately
 14 23 preceding the application.
 14 24    (3)  If the applicant's certificate, license, or permit was
 14 25 issued more than four years prior to the application for
 14 26 issuance of an initial certificate under this section, that
 14 27 the applicant has fulfilled the requirements of continuing
 14 28 professional education that would have been applicable under
 14 29 subsection 4.
 14 30    b.  As an alternative to the requirements of paragraph "a",
 14 31 a certificate holder licensed by another state who desires to
 14 32 establish the holder's principal place of business in this
 14 33 state shall request the issuance of a certificate from the
 14 34 board prior to establishing such principal place of business.
 14 35 The board shall issue a certificate to an individual whose
 15  1 qualifications are substantially equivalent to the certified
 15  2 public accountant certificate requirements of this chapter.
 15  3    4.  A certificate holder or licensee, for renewal of a
 15  4 certificate under this section or renewal of a license under
 15  5 section 542D.8, shall participate in a program of learning
 15  6 designed to maintain professional competency.  Such program of
 15  7 learning must comply with rules adopted by the board.  The
 15  8 board, by rule, may grant an exception to this requirement for
 15  9 a certificate or license holder who does not perform or offer
 15 10 to perform for the public one or more kinds of services
 15 11 involving the use of accounting or auditing skills, including
 15 12 issuance of reports on financial statements or the use of one
 15 13 or more kinds of management advisory, financial advisory, or
 15 14 consulting services, or the preparation of tax returns or the
 15 15 furnishing of advice on tax matters.  A licensee granted an
 15 16 exception by the board shall place the word "inactive"
 15 17 adjacent to the licensee's certified public accountant title
 15 18 or accounting practitioner title on any business card,
 15 19 letterhead, or other document or device, with the exception of
 15 20 the licensee's certified public accountant certificate or
 15 21 accounting practitioner registration, on which the licensee's
 15 22 certified public accountant or accounting practitioner title
 15 23 appears.
 15 24    5.  The board shall charge an application fee for initial
 15 25 issuance or renewal of a certificate in an amount prescribed
 15 26 by the board by rule.
 15 27    6.  An applicant for initial issuance or renewal of a
 15 28 certificate shall list in the application all states in which
 15 29 the applicant has applied for or holds a certificate, license,
 15 30 or permit and list any past denial, revocation, or suspension
 15 31 of a certificate, license, or permit.  A holder of or
 15 32 applicant for a certificate under this section shall notify
 15 33 the board in writing, within thirty days after its occurrence,
 15 34 of any issuance, denial, revocation, or suspension of a
 15 35 certificate, license, or permit by another state.
 16  1    7.  The board shall issue a certificate to a holder of a
 16  2 substantially equivalent foreign designation, upon
 16  3 satisfaction of all of the following:
 16  4    a.  The foreign authority which issued the designation
 16  5 allows a person who holds a valid certificate issued by this
 16  6 state to obtain such foreign authority's comparable
 16  7 designation.
 16  8    b.  The foreign designation satisfies all of the following:
 16  9    (1)  The designation was issued by a foreign authority that
 16 10 regulates the practice of public accountancy and the foreign
 16 11 designation has not expired or been revoked or suspended.
 16 12    (2)  The designation entitles the holder to issue reports
 16 13 on financial statements.
 16 14    (3)  The designation was issued upon the basis of
 16 15 education, examination, and experience requirements
 16 16 established by the foreign authority or by law.
 16 17    c.  The applicant satisfies all of the following:
 16 18    (1)  The designation was issued based on education and
 16 19 examination standards substantially equivalent to those in
 16 20 effect in this state at the time the foreign designation was
 16 21 granted.
 16 22    (2)  The applicant satisfies an experience requirement,
 16 23 substantially equivalent to the requirement set out in section
 16 24 542D.5, subsection 8, in the jurisdiction which issued the
 16 25 foreign designation or has completed four years of
 16 26 professional experience in this state; or meets equivalent
 16 27 requirements prescribed by the board by rule, within the ten
 16 28 years immediately preceding the application.
 16 29    (3)  The applicant has passed qualifying examinations in
 16 30 national standards and the laws, rules, and code of ethical
 16 31 conduct in effect in this state.
 16 32    8.  An applicant under subsection 7 shall list in the
 16 33 application all jurisdictions, foreign and domestic, in which
 16 34 the applicant has applied for or holds a designation to
 16 35 practice public accountancy.  A holder of a certificate issued
 17  1 under this section shall notify the board in writing, within
 17  2 thirty days after its occurrence, of any issuance, denial,
 17  3 revocation, or suspension of a designation or commencement of
 17  4 a disciplinary or enforcement action by any jurisdiction.
 17  5    9.  The board has sole authority to interpret the
 17  6 application of subsections 7 and 8.
 17  7    10.  The board, by rule, shall require as a condition for
 17  8 renewal of a certificate under this section, by any
 17  9 certificate holder who performs compilation services for the
 17 10 public other than through a certified public accountant firm,
 17 11 that such individual undergo, no more frequently than once
 17 12 every three years, a peer review conducted in such manner as
 17 13 the board shall by rule specify, and such review shall include
 17 14 verification that such individual has met the competency
 17 15 requirements set out in professional standards for such
 17 16 services.
 17 17    Sec. 7.  NEW SECTION.  542D.7  FIRM PERMITS TO PRACTICE –
 17 18 ATTEST EXPERIENCE AND PEER REVIEW.
 17 19    1.  The board shall issue or renew a permit to practice as
 17 20 a certified public accountant firm or accounting practitioner
 17 21 firm to a person that makes application and demonstrates the
 17 22 qualifications set forth in this section, or to a certified
 17 23 public accountant firm originally licensed in another state
 17 24 that establishes an office in this state.  A person or firm
 17 25 holding a permit to practice issued by this state prior to
 17 26 July 1, 2001, is deemed to have met the requirements of this
 17 27 section.  A firm must hold a permit issued under this section
 17 28 in order to provide attest services or to use the title "CPAs"
 17 29 or "APs" or "CPA firm" or "AP firm".
 17 30    2.  A permit shall be initially issued and renewed for a
 17 31 period of not more than three years, but in any event shall
 17 32 expire on June 30 of the year of expiration.  An application
 17 33 for a permit shall be made in such form, and in the case of an
 17 34 application for renewal, between such dates as the board may
 17 35 by rule specify, and the board shall grant or deny an
 18  1 application within thirty days after the application is filed.
 18  2 If the applicant seeks the opportunity to show that issuance
 18  3 or renewal of a permit was mistakenly denied, or if the board
 18  4 is not able to determine whether an application should be
 18  5 granted or denied, the board may issue to the applicant a
 18  6 provisional permit, which shall expire ninety days after its
 18  7 issuance or when the board determines whether or not to issue
 18  8 or renew the permit for which application was made, whichever
 18  9 occurs first.
 18 10    3.  An applicant for initial issuance or renewal of a
 18 11 permit to practice as a firm must show that notwithstanding
 18 12 any other provision of law, the ownership of the firm, in
 18 13 terms of financial interests and voting rights of all
 18 14 partners, officers, shareholders, members, and managers
 18 15 belongs to holders of a certificate issued by a state, and
 18 16 that such partners, officers, shareholders, members, and
 18 17 managers, whose principal place of business is in this state
 18 18 and who perform professional services in this state, hold a
 18 19 certificate issued under section 542D.6 or a license issued
 18 20 under section 542D.8.
 18 21    c.  An individual certificate holder who is responsible for
 18 22 supervising attest or compilation services and signs or
 18 23 authorizes someone to sign the accountant's report on the
 18 24 financial statements on behalf of the firm, shall meet the
 18 25 competency requirements set out in nationally recognized
 18 26 professional standards for such services.
 18 27    d.  An individual certificate holder who signs or
 18 28 authorizes someone to sign the accountant's report on the
 18 29 financial statements on behalf of the firm shall meet the
 18 30 competency requirements set out in nationally recognized
 18 31 professional standards for such services.
 18 32    4.  An applicant for initial issuance or renewal of a
 18 33 permit to practice as a certified public accountant firm is
 18 34 required to register each office of the firm within this state
 18 35 with the board and to show that all attest and compilation
 19  1 services rendered in this state are under the charge of a
 19  2 person holding a valid certificate issued under section 542D.6
 19  3 or by some other state.
 19  4    5.  The board, by rule, shall establish and charge an
 19  5 application fee for each application for initial issuance or
 19  6 renewal of a permit.
 19  7    6.  An applicant for initial issuance or renewal of a
 19  8 permit shall list in the application all states in which the
 19  9 applicant has applied for or holds a permit as a certified
 19 10 public accountant or accounting practitioner firm and list any
 19 11 past denial, revocation, or suspension of a permit by another
 19 12 state.  A holder of or applicant for a permit shall notify the
 19 13 board in writing within thirty days after an occurrence of any
 19 14 of the following:
 19 15    a.  A change in the identity of a partner, officer,
 19 16 shareholder, member, or manager whose principal place of
 19 17 business is in this state.
 19 18    b.  A change in the number or location of offices within
 19 19 this state.
 19 20    c.  A change in the identity of a person in charge of such
 19 21 offices.
 19 22    d.  The issuance, denial, revocation, or suspension of a
 19 23 permit by another state.
 19 24    7.  A firm, after receiving or renewing a permit which is
 19 25 not in compliance with this section as a result of a change in
 19 26 firm ownership or personnel, shall take corrective action to
 19 27 bring the firm back into compliance as quickly as possible or
 19 28 apply to modify or amend the permit.  The board may grant a
 19 29 reasonable period of time for a firm to take such corrective
 19 30 action.  Failure to comply within a reasonable period as
 19 31 deemed by the board shall result in the suspension or
 19 32 revocation of the firm permit.
 19 33    8.  The board, by rule, shall require as a condition to
 19 34 renewal of a permit to practice as a certified public
 19 35 accountant firm, that an applicant undergo, no more frequently
 20  1 than once every three years, a peer review conducted in such
 20  2 manner as the board specifies.  The review shall include a
 20  3 verification that any individual in the firm who is
 20  4 responsible for supervising attest and compilation services
 20  5 and who signs or authorizes someone to sign the accountant's
 20  6 report on a financial statement on behalf of the firm meets
 20  7 the competency requirements set forth in the professional
 20  8 standards for such services.
 20  9    Such rules shall include reasonable provision for
 20 10 compliance by an applicant showing that the applicant, within
 20 11 the preceding three years, has undergone a peer review that is
 20 12 a satisfactory equivalent to the peer review required under
 20 13 this subsection.  An applicant's completion of a peer review
 20 14 program endorsed or supported by the American institute of
 20 15 certified public accountants, or other substantially similar
 20 16 review as determined by the board, satisfies the requirements
 20 17 of this subsection.
 20 18    9.  An applicant for a permit to practice as a certified
 20 19 public accountant firm, at the time of renewal, may request in
 20 20 writing upon forms provided by the board, a waiver from the
 20 21 requirements of subsection 8.  The board may grant a waiver
 20 22 upon a showing satisfactory to the board of any of the
 20 23 following:
 20 24    a.  The applicant does not engage in, and does not intend
 20 25 to engage in during the following year, financial reporting
 20 26 areas of practice, including but not limited to financial
 20 27 audits, compilations, and reviews.  An applicant granted a
 20 28 waiver pursuant to this paragraph shall immediately notify the
 20 29 board if the applicant engages in such practice, and shall be
 20 30 subject to peer review.
 20 31    b.  Reasons of health.
 20 32    c.  Military service.
 20 33    d.  Instances of hardship.
 20 34    e.  Other good cause as determined by the board.
 20 35    10.  Peer review records are privileged and confidential,
 21  1 and are not subject to discovery, subpoena, or other means of
 21  2 legal compulsion.  Peer review records are not admissible in
 21  3 evidence in a judicial, administrative, or arbitration
 21  4 proceeding.  Information or documents discoverable from
 21  5 sources other than a peer review team do not become
 21  6 nondiscoverable from such other sources because they are made
 21  7 available to or are in the possession of a peer review team.
 21  8 Information or documents publicly available from the American
 21  9 institute of certified public accountants relating to quality
 21 10 or peer review are not privileged or confidential under this
 21 11 subsection.  A person or organization participating in the
 21 12 peer review process shall not testify as to the findings,
 21 13 recommendations, evaluations, or opinions of a peer review
 21 14 team in a judicial, administrative, or arbitration proceeding.
 21 15    11.  A person is not liable as a result of an act,
 21 16 omission, or decision made in connection with the person's
 21 17 service in a peer review team, unless the act, omission, or
 21 18 decision is made with actual malice.  A person is not liable
 21 19 as a result of providing information to a peer review team, or
 21 20 for disclosure of privileged matters to a peer review team.
 21 21    12.  The costs of the peer review shall be paid by the
 21 22 applicant.
 21 23    Sec. 8.  NEW SECTION.  542D.8  QUALIFICATIONS FOR AND
 21 24 ISSUANCE OF A LICENSE AS AN ACCOUNTING PRACTITIONER.
 21 25    1.  An accounting practitioner license shall be issued by
 21 26 the board to a person who is a resident of this state, has a
 21 27 place of business in this state, or is regularly employed in
 21 28 this state, who makes application on a form prescribed and
 21 29 furnished by the board, passes a written examination
 21 30 prescribed by the board, and meets one of the following
 21 31 requirements:
 21 32    a.  Has two or more years of actual experience in the
 21 33 practice of an accounting practitioner as an employee of a
 21 34 certified public accountant or an accounting practitioner.
 21 35    b.  Submits evidence satisfactory to the board that the
 22  1 applicant is a graduate of a four-year college or university
 22  2 accredited by the north central accreditation association or
 22  3 other regional accreditation association having equivalent
 22  4 standards, with a major in accounting, or that the applicant
 22  5 is a graduate in accountancy from a business or correspondence
 22  6 school accredited by the accrediting commission for business
 22  7 schools or the accrediting commission of the national home
 22  8 study council.
 22  9    c.  Submits evidence of at least five years of continuous
 22 10 experience engaged in performing any of the services set forth
 22 11 in section 542D.3, subsection 1, on a full-time basis.
 22 12    2.  An applicant for a license to practice as an accounting
 22 13 practitioner shall pay to the board an examination fee prior
 22 14 to examination.  The amount of the fee shall be set by the
 22 15 board based upon the annual cost of administering the
 22 16 examination.
 22 17    3.  An examination shall be conducted by the board as often
 22 18 as deemed necessary, but not less than two times per year.
 22 19    4.  The examination shall be prescribed by the board and
 22 20 shall be designed and given in a manner as to fairly test the
 22 21 applicant's knowledge of accounting.  The examination shall
 22 22 not include questions relating to the subject of auditing.
 22 23    5.  The board, in its discretion, may use all or any part
 22 24 of a standard or uniform examination and advisory grading
 22 25 service that is provided or furnished by a national accounting
 22 26 organization or society to assist the board in the performance
 22 27 of its duties under this chapter.  An examination in theory
 22 28 shall be in writing and the identity of the person taking the
 22 29 examination shall be concealed until after the examination
 22 30 papers have been graded.
 22 31    6.  If an applicant has partially passed an examination
 22 32 given in another state, under requirements that the board
 22 33 finds to be substantially equivalent to those required in
 22 34 examinations given in this state, the results of the other
 22 35 state's examination shall be accepted as though given in this
 23  1 state.
 23  2    7.  An applicant who successfully passes all subjects in
 23  3 which examined shall be issued a license as an accounting
 23  4 practitioner by the board.  The cost of the license shall be
 23  5 based upon the administrative costs of the board and the costs
 23  6 of issuing the license.
 23  7    8.  An applicant who fails the examination once shall be
 23  8 allowed to take the examination at the next scheduled time.
 23  9 Thereafter, the applicant shall be allowed to take the
 23 10 examination at the discretion of the board.  An applicant who
 23 11 passes a portion of the examination shall have the right to be
 23 12 reexamined in the remaining subjects at a future examination,
 23 13 and if the applicant passes in the remaining subjects, the
 23 14 applicant shall be considered to have passed the entire
 23 15 examination.  An applicant who fails the examination may
 23 16 request in writing information from the board concerning the
 23 17 applicant's examination grade and subject areas or questions
 23 18 which the applicant failed to answer correctly, except that if
 23 19 the board administers a uniform, standardized examination, the
 23 20 board shall only be required to provide the examination grade
 23 21 and such other information concerning the applicant's
 23 22 examination results which is available to the board.
 23 23    9.  A license as an accounting practitioner shall expire in
 23 24 multiyear intervals as determined by the board.  The board
 23 25 shall notify a person licensed under this chapter of the date
 23 26 of expiration of the license and the amount of the fee
 23 27 required for its renewal.  The notice shall be mailed at least
 23 28 one month in advance of the expiration date.  A person who
 23 29 fails to renew a license to practice as an accounting
 23 30 practitioner by the expiration date shall be allowed to do so
 23 31 within thirty days following its expiration, but the board may
 23 32 assess a reasonable penalty.  A renewal of a license shall be
 23 33 issued to a person licensed pursuant to this section or who
 23 34 holds a license issued under the law of another state.  A
 23 35 person holding a license as an accounting practitioner issued
 24  1 by this state prior to July 1, 2001, is deemed to have met the
 24  2 requirements of this section.
 24  3    10.  The board, in its discretion, may waive an examination
 24  4 and issue a license as an accounting practitioner to an
 24  5 applicant who satisfies either of the following:
 24  6    a.  The applicant holds, or is eligible to hold, an
 24  7 accounting practitioner license issued, after examination, by
 24  8 a state which extends by reciprocity similar privileges to an
 24  9 accounting practitioner of this state, and who, as of the time
 24 10 of issuance of the license, possessed the basic qualifications
 24 11 set forth in subsection 1.
 24 12    b.  The applicant has passed the examination required under
 24 13 the laws of another state and possesses the basic
 24 14 qualifications set forth in subsection 1 at the time the
 24 15 applicant applied for a license in this state.
 24 16    11.  A person applying for an accounting practitioner
 24 17 license shall pay a fee as determined by the board based upon
 24 18 the costs of issuing such licenses.
 24 19    Sec. 9.  NEW SECTION.  542D.9  APPOINTMENT OF SECRETARY OF
 24 20 STATE AS AGENT.
 24 21    Application for a certificate under section 542D.6, a
 24 22 license under section 542D.8, or a permit to practice under
 24 23 section 542D.7 by a person or a firm not a resident of this
 24 24 state constitutes appointment of the secretary of state as the
 24 25 applicant's agent upon whom process may be served in any
 24 26 action or proceeding against the applicant arising out of a
 24 27 transaction or operation connected with or incidental to
 24 28 services performed by the applicant while a licensee within
 24 29 this state.
 24 30    Sec. 10.  NEW SECTION.  542D.10  ENFORCEMENT AGAINST A
 24 31 HOLDER OF A CERTIFICATE, PERMIT, OR LICENSE.
 24 32    1.  After notice and hearing pursuant to section 542D.11,
 24 33 the board may revoke, suspend for a period of time not to
 24 34 exceed two years, or refuse to renew a license; reprimand,
 24 35 censure, or limit the scope of practice of any licensee;
 25  1 impose an administrative penalty not to exceed one thousand
 25  2 dollars; or place any licensee on probation; all with or
 25  3 without terms, conditions, and in combinations of remedies,
 25  4 for any one or more of the following reasons:
 25  5    a.  Fraud or deceit in obtaining a license, which may also
 25  6 result in permanent revocation of the license.
 25  7    b.  Dishonesty, fraud, or gross negligence in the practice
 25  8 of public accounting.
 25  9    c.  Engaging in any activity prohibited under section
 25 10 524D.14 or permitting persons under the licensee's supervision
 25 11 to do so.
 25 12    d.  Violation of a rule of professional conduct adopted by
 25 13 the board under the authority granted by this chapter.
 25 14    e.  Conviction of a felony under the laws of any state of
 25 15 the United States.
 25 16    f.  Conviction of any crime, any element of which is
 25 17 dishonesty or fraud as provided in section 542D.5, subsection
 25 18 2, under the laws of any state of the United States.
 25 19    g.  Cancellation, revocation, suspension, or refusal to
 25 20 review the authority to practice as a certified public
 25 21 accountant, or the acceptance of the voluntary surrender of a
 25 22 license to practice as a certified public accountant to
 25 23 conclude a pending disciplinary action, by any other state for
 25 24 any cause other than failure to pay appropriate fees in the
 25 25 other state.
 25 26    h.  Suspension or revocation of the right to practice
 25 27 before any state or federal agency.
 25 28    i.  Conduct discreditable to the public accounting
 25 29 profession.
 25 30    j.  Violation of section 272C.10.
 25 31    2.  In lieu of or in addition to any remedy specifically
 25 32 provided in subsection 1, the board may require a licensee to
 25 33 satisfy a peer review or desk review process on such terms as
 25 34 the board may specify, satisfactorily complete a continuing
 25 35 education program, or such additional remedies as the board
 26  1 may specify by rule.
 26  2    Sec. 11.  NEW SECTION.  542D.11  INVESTIGATIONS AND
 26  3 HEARINGS.
 26  4    1.  The board may initiate proceedings under this chapter
 26  5 upon written complaint or on its own motion pursuant to other
 26  6 information received by the board suggesting violations of
 26  7 this chapter or board rules.  The board may conduct an
 26  8 investigation as needed to determine whether probable cause
 26  9 exists to initiate such proceedings.  In aid of such
 26 10 investigation, the board may issue subpoenas to compel
 26 11 witnesses to testify or persons to produce evidence consistent
 26 12 with the provisions of section 272C.6, subsection 3.  The
 26 13 board may also review the publicly available public accounting
 26 14 work product of licensees on a general or random basis to
 26 15 determine whether reasonable grounds exist to initiate
 26 16 proceedings under this chapter or to conduct a more specific
 26 17 investigation.
 26 18    2.  A written notice stating the nature of the charge or
 26 19 charges against the accused and the time and place of the
 26 20 hearing before the board on the charges shall be served on the
 26 21 accused not less than thirty days prior to the date of hearing
 26 22 either personally or by mailing a copy by restricted certified
 26 23 mail to the last known address of the accused.
 26 24    3.  At any hearing the accused may appear in person or by
 26 25 counsel, produce evidence and witnesses on behalf of the
 26 26 accused, cross-examine witnesses, and examine evidence which
 26 27 is produced against the accused.  A firm may appear by a
 26 28 partner, officer, director, shareholder, member, or manager.
 26 29    4.  The board may issue subpoenas in any proceeding to
 26 30 compel witnesses to testify and to produce documentary
 26 31 evidence on behalf of the board and shall issue such subpoenas
 26 32 upon the application of the accused, pursuant to section
 26 33 272C.6, subsection 3.
 26 34    5.  Evidence supporting the board's charges may be
 26 35 presented at any hearing by an assistant attorney general.
 27  1    6.  The decision of the board shall be by a majority vote
 27  2 of a quorum of the board.  Licensee discipline shall only be
 27  3 imposed upon the majority vote of the member of the board not
 27  4 disqualified pursuant to section 17A.17, subsection 8, or
 27  5 other applicable law.
 27  6    7.  Judicial review may be sought in accordance with
 27  7 chapter 17A.
 27  8    Sec. 12.  NEW SECTION.  542D.12  REINSTATEMENT.
 27  9    1.  In any case in which the board has suspended, revoked,
 27 10 or restricted a license, refused to renew a license, or
 27 11 accepted the voluntary surrender of a license to conclude a
 27 12 pending disciplinary investigation or action, the board may,
 27 13 upon written application, modify or terminate the suspension,
 27 14 reissue the license, or modify or remove the restriction, with
 27 15 or without terms and conditions.
 27 16    2.  The board is vested with discretionary authority to
 27 17 specify by rule the manner in which such applications shall be
 27 18 made, the times within which they shall be made, the
 27 19 circumstances in which a hearing will be held, and the grounds
 27 20 upon which such applications will be decided.  The rules shall
 27 21 provide at a minimum that the burden is on the licensee to
 27 22 produce evidence that the basis for revocation, suspension,
 27 23 restriction, refusal to renew, or voluntarily surrender no
 27 24 longer exists and that it will be in the public interest for
 27 25 the board to grant the application on such terms and
 27 26 conditions as the board deems desirable.
 27 27    Sec. 13.  NEW SECTION.  542D.13  UNLAWFUL ACTS.
 27 28    1.  Only a certified public accountant may issue a report
 27 29 on financial statements of a person, firm, organization, or
 27 30 governmental unit, or offer to render or render any attest
 27 31 service.  Only a certified public accountant or accounting
 27 32 practitioner may render compilation services.  This
 27 33 restriction does not prohibit such acts by a public official
 27 34 or public employee in the performance of that person's duties;
 27 35 or prohibit the performance by any nonlicensee of other
 28  1 services involving the use of accounting skills, including the
 28  2 preparation of tax returns, management advisory services, and
 28  3 the preparation of financial statements without the issuance
 28  4 of reports on such financial statements.  A nonlicensee may
 28  5 prepare financial statements and issue nonattest transmittals
 28  6 or information on such statements or transmittals which do not
 28  7 purport to be in compliance with the statements on standards
 28  8 for accounting and review services.
 28  9    2.  A licensee performing attest or compilation services
 28 10 must provide those services consistent with professional
 28 11 standards.
 28 12    3.  A person not holding a certificate shall not use or
 28 13 assume the title "certified public accountant" or the
 28 14 abbreviation "CPA" or any other title, designation, words,
 28 15 letters, abbreviation, sign, card, or device tending to
 28 16 indicate that such person is a certified public accountant.
 28 17    4.  A firm shall not provide attest services or assume or
 28 18 use the title "certified public accountants" or the
 28 19 abbreviation "CPAs" or any other title, designation, words,
 28 20 letters, abbreviation, sign, card, or device tending to
 28 21 indicate that such firm is a certified public accountant firm
 28 22 unless the firm holds a permit issued under section 542D.7 and
 28 23 ownership of the firm satisfies the requirements of this
 28 24 chapter and rules adopted by the board.
 28 25    5.  A person shall not assume or use the title "accounting
 28 26 practitioner" or the abbreviation "AP" or any other title,
 28 27 designation, words, letters, abbreviation, sign, card, or
 28 28 device tending to indicate that such person is an accounting
 28 29 practitioner unless that person holds a license issued under
 28 30 section 542D.8.
 28 31    6.  A firm not holding a permit issued under section 542D.7
 28 32 shall not provide compilation services or assume or use the
 28 33 title "accounting practitioner" the abbreviation "AP" or any
 28 34 other title, designation, words, letters, abbreviation, sign,
 28 35 card, or device tending to indicate that such firm is composed
 29  1 of accounting practitioners.
 29  2    7.  A person or firm not holding a certificate, permit, or
 29  3 license issued under section 542D.6, 542D.7, or 542D.8 shall
 29  4 not assume or use the title "certified accountant", "chartered
 29  5 accountant", "enrolled accountant", "licensed accountant",
 29  6 "registered accountant", "accredited accountant", or any other
 29  7 title or designation likely to be confused with the title
 29  8 "certified public accountant" or "accounting practitioner", or
 29  9 use any of the abbreviations "CA", "LA", "RA", "AA", or
 29 10 similar abbreviation likely to be confused with the
 29 11 abbreviation "CPA" or "AP".  The title "enrolled agent" or
 29 12 "EA" may only be used by individuals so designated by the
 29 13 internal revenue service.
 29 14    8.  A nonlicensee shall not use language in any statement
 29 15 relating to the financial affairs of a person or entity which
 29 16 is conventionally used by licensees in reports on financial
 29 17 statements.  The board shall develop and issue language which
 29 18 nonlicensees may use in connection with such financial
 29 19 information.
 29 20    9.  A person or firm not holding a certificate, permit, or
 29 21 license issued under section 542D.6, 542D.7, or 542D.8 shall
 29 22 not assume or use any title or designation that includes the
 29 23 word "accountant", "auditor", or "accounting", in connection
 29 24 with any other language that implies that such person or firm
 29 25 holds such a certificate, permit, or license or has special
 29 26 competence as an accountant or auditor.  However, this
 29 27 subsection does not prohibit an officer, partner, member,
 29 28 manager, or employee of a firm or organization from affixing
 29 29 that person's own signature to a statement in reference to the
 29 30 financial affairs of such firm or organization with wording
 29 31 which designates the position, title, or office that the
 29 32 person holds, or prohibit any act of a public official or
 29 33 employee in the performance of such person's duties.  This
 29 34 subsection does not prohibit the use of the title or
 29 35 designation "accountant" by persons other than those holding a
 30  1 certificate or license under this chapter.
 30  2    10.  A person holding a certificate or license or firm
 30  3 holding a permit under this chapter shall not use a
 30  4 professional or firm name or designation that is misleading
 30  5 about the legal form of the firm, or about the persons who are
 30  6 partners, officers, members, managers, or shareholders of the
 30  7 firm, or about any other matter.  However, the name of one or
 30  8 more former partners, members, managers, or shareholders may
 30  9 be included in the name of a firm or its successor.
 30 10    11.  This section does not apply to a person or firm
 30 11 holding a certification, designation, degree, or license
 30 12 granted in a foreign country entitling the holder to engage in
 30 13 the practice of public accountancy or its equivalent in such
 30 14 country, whose activities in this state are limited to
 30 15 providing professional services to a person or firm who is a
 30 16 resident of, government of, or business entity of the country
 30 17 in which the person holds such entitlement, who does not
 30 18 perform attest or compilation services, and who does not issue
 30 19 reports with respect to the financial statements of any other
 30 20 person, firm, or governmental unit in this state, and who does
 30 21 not use in this state any title or designation other than the
 30 22 one under which the person practices in such country, followed
 30 23 by a translation of such title or designation into the English
 30 24 language, if it is in a different language, and by the name of
 30 25 such country.
 30 26    12.  A holder of a certificate issued under section 542D.6
 30 27 shall not perform attest services in a firm that does not hold
 30 28 a permit issued under section 542D.7.
 30 29    13.  An individual licensee shall not issue a report in
 30 30 standard form upon a compilation of financial information
 30 31 through any form of business that does not hold a permit
 30 32 issued under section 542D.7 unless the report discloses the
 30 33 name of the business through which the individual is issuing
 30 34 the report and the individual licensee does all of the
 30 35 following:
 31  1    a.  Signs the compilation report identifying the individual
 31  2 as a certified public accountant or accounting practitioner.
 31  3    b.  Meets competency requirements provided in applicable
 31  4 standards.
 31  5    c.  Undergoes, no less frequently than once every three
 31  6 years, a peer review conducted in a manner as specified by the
 31  7 board.  The review shall include verification that such
 31  8 individual has met the competency requirements set out in
 31  9 professional standards for such services.
 31 10    14.  This section does not prohibit a practicing attorney
 31 11 from preparing or presenting records or documents customarily
 31 12 prepared by an attorney in connection with the attorney's
 31 13 professional work in the practice of law.
 31 14    15.  a.  A licensee shall not for a commission recommend or
 31 15 refer a client to any product or service, or for a commission
 31 16 recommend or refer another person to any product or service to
 31 17 be supplied by a client, or receive a commission, when the
 31 18 licensee also performs for that client any of the following:
 31 19    (1)  An audit or review of a financial statement.
 31 20    (2)  A compilation of a financial statement when the
 31 21 licensee expects, or reasonably might expect, that a third
 31 22 party will use the financial statement and the licensee's
 31 23 compilation report does not disclose a lack of independence.
 31 24    (3)  An examination of prospective financial information.
 31 25    The prohibitions under this paragraph apply during the
 31 26 period in which the licensee is engaged to perform any of the
 31 27 services identified in subparagraphs (1) through (3), and the
 31 28 period covered by any historical financial statements involved
 31 29 in such services.
 31 30    b.  A licensee who is not prohibited by this section from
 31 31 performing services for or receiving a commission and who is
 31 32 paid or expects to be paid a commission shall disclose that
 31 33 fact to any person or entity to whom the licensee recommends
 31 34 or refers a product or service to which the commission
 31 35 relates.
 32  1    c.  A licensee who accepts a referral fee for recommending
 32  2 a service of a licensee or referring a licensee to any person
 32  3 or entity or who pays a referral fee to obtain a client shall
 32  4 disclose such acceptance or payment to the client.
 32  5    16.  a.  A licensee shall not do any of the following:
 32  6    (1)  Perform professional services for a contingent fee, or
 32  7 receive such fee from a client for whom the licensee or the
 32  8 licensee's firm performs any of the following:
 32  9    (a)  An audit or review of a financial statement.
 32 10    (b)  A compilation of a financial statement when the
 32 11 licensee expects, or reasonably might expect, that a third
 32 12 party will use the financial statement and the licensee's
 32 13 compilation report does not disclose a lack of independence.
 32 14    (c)  An examination of prospective financial information.
 32 15    (2)  Prepare for a client an original or amended tax return
 32 16 or claim for a tax refund for a contingent fee.
 32 17    b.  Paragraph "a" applies during the period in which the
 32 18 licensee is engaged to perform any of the listed services and
 32 19 the period covered by any historical financial statements
 32 20 involved in such listed services.
 32 21    c.  For purposes of this subsection, a contingent fee is a
 32 22 fee established for the performance of a service pursuant to
 32 23 an arrangement in which a fee will not be charged unless a
 32 24 specified finding or result is attained, or in which the
 32 25 amount of the fee is otherwise dependent upon the finding or
 32 26 result of such service.  A fee shall not be considered as
 32 27 being a contingent fee if fixed by a court or other public
 32 28 authority, or, in a tax matter, if determined based on the
 32 29 results of a judicial proceeding or the findings of a
 32 30 governmental agency.  A licensee's fee may vary depending on
 32 31 the complexity of the services rendered.
 32 32    Sec. 14.  NEW SECTION.  542D.14  INJUNCTION AGAINST
 32 33 UNLAWFUL ACTS, CIVIL PENALTIES, AND CONSENT AGREEMENTS.
 32 34    1.  If, as a result of an investigation under section
 32 35 542D.11 or otherwise, the board believes that a person or firm
 33  1 has engaged, or is about to engage, in an act or practice
 33  2 which constitutes or will constitute a violation of section
 33  3 542D.13, the board may make application to the district court
 33  4 for an order enjoining such act or practice.  Upon a showing
 33  5 by the board that such person or firm has engaged, or is about
 33  6 to engage, in any such act or practice, an injunction,
 33  7 restraining order, or other order as may be appropriate shall
 33  8 be granted by the court.
 33  9    2.  In addition to a criminal penalty provided for in
 33 10 section 542D.15, the board, by order, may impose a civil
 33 11 penalty not to exceed one thousand dollars for each offense
 33 12 upon a person who is not a licensee under this chapter and who
 33 13 engages in conduct prohibited by section 542D.13.  Each day of
 33 14 a continued violation constitutes a separate offense.
 33 15    3.  The board, in determining the amount of a civil penalty
 33 16 to be imposed, may consider any of the following:
 33 17    a.  Whether the amount imposed will be a substantial
 33 18 economic deterrent to the violation.
 33 19    b.  The circumstances leading to the violation.
 33 20    c.  The severity of the violation and the risk of harm to
 33 21 the public.
 33 22    d.  The economic benefits gained by the violator as a
 33 23 result of noncompliance.
 33 24    e.  The interest of the public.
 33 25    4.  The board, before issuing an order under this section,
 33 26 shall provide the person written notice and the opportunity to
 33 27 request a hearing.  The hearing must be requested within
 33 28 thirty days after receipt of the notice and shall be conducted
 33 29 in the same manner as provided for disciplinary proceedings
 33 30 involving a licensee under this chapter.
 33 31    5.  The board, in connection with a proceeding under this
 33 32 section, may issue subpoenas to compel the attendance and
 33 33 testimony of witnesses and the disclosure of evidence, and may
 33 34 request the attorney general to bring an action to enforce the
 33 35 subpoena.
 34  1    6.  A person aggrieved by the imposition of a civil penalty
 34  2 under this section may seek judicial review pursuant to
 34  3 section 17A.19.
 34  4    7.  If a person fails to pay a civil penalty within thirty
 34  5 days after entry of an order imposing the civil penalty, or if
 34  6 the order is stayed pending an appeal, within ten days after
 34  7 the court enters a final judgment in favor of the board, the
 34  8 board shall notify the attorney general.  The attorney general
 34  9 shall commence an action to recover the amount of the penalty,
 34 10 including reasonable attorney fees and costs.
 34 11    8.  An action to enforce an order under this section may be
 34 12 joined with an action for an injunction.
 34 13    9.  The board, in its discretion and in lieu of prosecuting
 34 14 a first offense under this section, may enter into a consent
 34 15 agreement with a violator, or with a person guilty of aiding
 34 16 or abetting a violator, which acknowledges the violation and
 34 17 the violator's agreement to refrain from any further
 34 18 violations.
 34 19    Sec. 15.  NEW SECTION.  542D.15  CRIMINAL PENALTIES.
 34 20    1.  A person who violates a provision of section 542D.13 is
 34 21 guilty of a serious misdemeanor.
 34 22    2.  If the board has reason to believe that a person has
 34 23 committed a violation subject to subsection 1, the board may
 34 24 certify the facts to the attorney general of this state, or to
 34 25 the county attorney of the county where the person maintains a
 34 26 business office, who, in the attorney general's or county
 34 27 attorney's discretion, may initiate an appropriate criminal
 34 28 proceeding.
 34 29    3.  If, after an investigation under section 542D.11 or
 34 30 otherwise, the board has reason to believe that a person or
 34 31 firm has knowingly engaged in an act or practice that
 34 32 constitutes a violation subject to subsection 1, the board may
 34 33 submit its information to the attorney general of any state,
 34 34 or other appropriate law enforcement official, who, in such
 34 35 official's discretion, may initiate an appropriate criminal
 35  1 proceeding.
 35  2    Sec. 16.  NEW SECTION.  542D.16  SINGLE ACT EVIDENCE OF
 35  3 PRACTICE.
 35  4    In an action brought under section 542D.14 or 542D.15,
 35  5 evidence of the commission of a single act prohibited by this
 35  6 chapter is sufficient to justify a penalty, injunction,
 35  7 restraining order, or conviction, without evidence of a
 35  8 general course of conduct.
 35  9    Sec. 17.  NEW SECTION.  542D.17  CONFIDENTIAL
 35 10 COMMUNICATIONS.
 35 11    A licensee shall not voluntarily disclose information
 35 12 communicated to the licensee by a client relating to and in
 35 13 connection with services rendered to the client by the
 35 14 licensee, except with the permission of the client, or an
 35 15 heir, successor, or personal representative of the client.
 35 16 Such information is deemed to be confidential.  However, this
 35 17 section shall not be construed as prohibiting the disclosure
 35 18 of information required to be disclosed by the standards of
 35 19 the public accounting profession in reporting on the
 35 20 examination of financial statements or as prohibiting
 35 21 disclosures in a court proceeding, in an investigation or
 35 22 proceeding under section 542D.11, in an ethical investigation
 35 23 conducted by a private professional organization, in the
 35 24 course of a peer review, to another person active in the
 35 25 licensee's firm performing services for that client on a need-
 35 26 to-know basis, to persons associated with the investigative
 35 27 entity who need this information for the sole purpose of
 35 28 assuring quality control, or as otherwise required by law.
 35 29    Sec. 18.  NEW SECTION.  542D.18  LICENSEES' WORKING PAPERS
 35 30 – CLIENTS' RECORDS.
 35 31    1.  Subject to section 542D.17, all statements, records,
 35 32 schedules, working papers, and memoranda made by a licensee or
 35 33 a partner, shareholder, officer, director, member, manager, or
 35 34 employee of a licensee, incident to, or in the course of,
 35 35 rendering services to a client, except reports submitted by
 36  1 the licensee to the client and except for records that are
 36  2 part of the client's records, are the property of the licensee
 36  3 in the absence of an express agreement between the licensee
 36  4 and the client to the contrary.  Such statement, record,
 36  5 schedule, working paper, or memorandum shall not be sold,
 36  6 transferred, or bequeathed, without the consent of the client
 36  7 or the client's personal representative or assignee, to anyone
 36  8 other than a surviving partner, stockholder, or member of the
 36  9 licensee, or any combined or merged firm or successor in
 36 10 interest to the licensee.  This section shall not be construed
 36 11 as prohibiting a temporary transfer of working papers or other
 36 12 material necessary in the course of carrying out peer reviews
 36 13 or as otherwise interfering with the disclosure of information
 36 14 pursuant to section 542D.17.
 36 15    2.  A licensee shall furnish to a client or former client,
 36 16 upon request and reasonable notice, the following:
 36 17    a.  A copy of the licensee's working papers, to the extent
 36 18 that such working papers include records that would ordinarily
 36 19 constitute part of the client's records and are not otherwise
 36 20 available to the client.
 36 21    b.  Accounting or other records belonging to, or obtained
 36 22 from or on behalf of, the client that the licensee removed
 36 23 from the client's premises or received for the client's
 36 24 account.  The licensee may make and retain copies of such
 36 25 documents of the client when they form the basis for work done
 36 26 by the licensee.
 36 27    3.  This chapter does not require a licensee to keep any
 36 28 working papers beyond the period prescribed in any other
 36 29 applicable statute.
 36 30    Sec. 19.  NEW SECTION.  542D.19  SUBSTANTIAL EQUIVALENCY.
 36 31    1.  a.  An individual whose principal place of business is
 36 32 not in this state having a certificate or license as a
 36 33 certified public accountant from any state which the national
 36 34 association of state boards of accountancy's national
 36 35 qualification appraisal service has verified to be in
 37  1 substantial equivalence with the certified public accountant
 37  2 certification requirements of this chapter is presumed to have
 37  3 qualifications substantially equivalent to this state's
 37  4 requirements.  Such individual shall have all the privileges
 37  5 of certificate or permit holders of this state without the
 37  6 need to obtain a certificate or permit under section 542D.6 or
 37  7 542D.7.  However, such individual shall notify the board of
 37  8 the individual's intent to engage in acts as a certified
 37  9 public accountant in this state under this section.
 37 10    b.  An individual whose principal place of business is not
 37 11 in this state having a certificate or license as a certified
 37 12 public accountant from any state which the national
 37 13 association of state boards of accountancy's national
 37 14 qualification appraisal service has not verified to be in
 37 15 substantial equivalence with the certified public accountant
 37 16 certification requirements of this chapter is presumed to have
 37 17 qualifications substantially equivalent to this state's
 37 18 requirements and shall have all the privileges of certificate
 37 19 or permit holders of this state without the need to obtain a
 37 20 certificate or permit under section 542D.6 or 542D.7 if such
 37 21 individual obtains from the national association of state
 37 22 boards of accountancy's national qualification appraisal
 37 23 service verification that such individual's certified public
 37 24 accountant qualifications are substantially equivalent to the
 37 25 certified public accountant certification requirements of this
 37 26 chapter.  However, such individual shall notify the board of
 37 27 the individual's intent to engage in acts as a certified
 37 28 public accountant in this state under this section.
 37 29    c.  A licensee or permittee of another state exercising the
 37 30 privilege afforded under this section, as a condition of the
 37 31 grant of this privilege, consents to all of the following:
 37 32    (1)  The personal and subject matter jurisdiction of the
 37 33 board.
 37 34    (2)  Compliance with this chapter and the board's rules.
 37 35    (3)  The appointment of the state board which issued the
 38  1 licensee's license as the licensee's or permittee's agent upon
 38  2 whom process may be served in any action or proceeding by the
 38  3 Iowa accountancy examining board against the licensee or
 38  4 permittee.
 38  5    2.  A licensee under this chapter offering or rendering
 38  6 services or using a certified public accountant or accounting
 38  7 practitioner title in another state is subject to disciplinary
 38  8 action in this state for an act committed in another state for
 38  9 which the licensee would be subject to discipline for the act
 38 10 committed in the other state.  Notwithstanding section
 38 11 542D.11, subsection 1, the board is required to investigate
 38 12 any complaint made by the board of accountancy of another
 38 13 state.
 38 14    Sec. 20.  Section 15E.208, subsection 5, paragraph d,
 38 15 subparagraph (4), Code Supplement 1999, is amended to read as
 38 16 follows:
 38 17    (4)  The manner of oversight required by the department or
 38 18 the auditor of state.  The articles must provide that the
 38 19 corporation shall submit a report to the governor, the general
 38 20 assembly, and the department.  The report shall provide a
 38 21 description of the corporation's activities and a summary of
 38 22 its finances, including financial awards.  The report shall be
 38 23 submitted not later than January 10 of each year.  The
 38 24 articles shall provide that an audit of the corporation must
 38 25 be conducted each year for the preceding year by a certified
 38 26 public accountant licensed pursuant to chapter 542C 542D.  The
 38 27 auditor of state may audit the books and accounts of the
 38 28 corporation at any time.  The results of the annual audit and
 38 29 any audit for the current year conducted by the auditor of
 38 30 state shall be included as part of the report.
 38 31    Sec. 21.  Section 99D.20, Code 1999, is amended to read as
 38 32 follows:
 38 33    99D.20  AUDIT OF LICENSEE OPERATIONS.
 38 34    Within ninety days after the end of each race meet, the
 38 35 licensee shall transmit to the commission an audit of the
 39  1 financial transactions and condition of the licensee's
 39  2 operations conducted under this chapter.  Additionally, within
 39  3 ninety days after the end of the licensee's fiscal year, the
 39  4 licensee shall transmit to the commission an audit of the
 39  5 financial transactions and condition of the licensee's total
 39  6 operations.  All audits shall be conducted by certified public
 39  7 accountants registered in the state of Iowa under chapter 542C
 39  8 542D.
 39  9    Sec. 22.  Section 99F.13, Code 1999, is amended to read as
 39 10 follows:
 39 11    99F.13  ANNUAL AUDIT OF LICENSEE OPERATIONS.
 39 12    Within ninety days after the end of the licensee's fiscal
 39 13 year, the licensee shall transmit to the commission an audit
 39 14 of the financial transactions and condition of the licensee's
 39 15 total operations.  All audits shall be conducted by certified
 39 16 public accountants registered or licensed in the state of Iowa
 39 17 under chapter 542C 542D.
 39 18    Sec. 23.  Section 203.16, subsection 7, Code Supplement
 39 19 1999, is amended to read as follows:
 39 20    7.  Where released at the request of the Iowa board of
 39 21 accountancy for licensee review and discipline in accordance
 39 22 with chapters 272C and 542C 542D and subject to the
 39 23 confidentiality requirements of section 272C.6.
 39 24    Sec. 24.  Section 203C.24, subsection 7, Code Supplement
 39 25 1999, is amended to read as follows:
 39 26    7.  Where released at the request of the Iowa board of
 39 27 accountancy for licensee review and discipline in accordance
 39 28 with chapters 272C and 542C 542D and subject to the
 39 29 confidentiality requirements of section 272C.6.
 39 30    Sec. 25.  Section 272C.1, subsection 6, paragraph c, Code
 39 31 1999, is amended to read as follows:
 39 32    c.  The Iowa accountancy examining board, created pursuant
 39 33 to chapter 542C 542D.
 39 34    Sec. 26.  Section 272C.3, subsection 2, paragraph a, Code
 39 35 1999, is amended to read as follows:
 40  1    a.  Revoke a license, or suspend a license either until
 40  2 further order of the board or for a specified period, upon any
 40  3 of the grounds specified in section 147.55, 148.6, 148B.7,
 40  4 153.34, 154A.24, 169.13, 542B.21, 542C.21 542D.10, 543B.29,
 40  5 544A.13, 544B.15, or 602.3203 or chapter 151, 155, 507B or
 40  6 522, as applicable, or upon any other grounds specifically
 40  7 provided for in this chapter for revocation of the license of
 40  8 a licensee subject to the jurisdiction of that board, or upon
 40  9 failure of the licensee to comply with a decision of the board
 40 10 imposing licensee discipline;
 40 11    Sec. 27.  Section 272C.4, subsection 6, Code 1999, is
 40 12 amended to read as follows:
 40 13    6.  Define by rule acts or omissions which are grounds for
 40 14 revocation or suspension of a license under section 147.55,
 40 15 148.6, 148B.7, 153.34, 154A.24, 169.13, 455B.191, 542B.21,
 40 16 542C.21 542D.10, 543B.29, 544A.13, 544B.15, or 602.3203 or
 40 17 chapter 151, 155, 507B or 522, as applicable, and to define by
 40 18 rule acts or omissions which constitute negligence, careless
 40 19 acts or omissions within the meaning of section 272C.3,
 40 20 subsection 2, paragraph "b", which licensees are required to
 40 21 report to the board pursuant to section 272C.9, subsection 2;
 40 22    Sec. 28.  Section 272C.5, subsection 2, paragraph c, Code
 40 23 1999, is amended to read as follows:
 40 24    c.  Shall state whether the procedures are an alternative
 40 25 to or an addition to the procedures stated in sections 147.58
 40 26 to 147.71, 148.6 to 148.9, 153.23 to 153.30, 153.33, and
 40 27 154A.23, 542B.22, 542C.23 542D.11, 543B.35, 543B.36, 544B.16.
 40 28    Sec. 29.  Section 272C.6, subsection 6, unnumbered
 40 29 paragraph 1, Code 1999, is amended to read as follows:
 40 30    A board created pursuant to chapter 147, 154A, 155, 169,
 40 31 542B, 542C 542D, 543B, 543D, 544A, or 544B may charge a fee
 40 32 not to exceed seventy-five dollars for conducting a
 40 33 disciplinary hearing pursuant to this chapter which results in
 40 34 disciplinary action taken against the licensee by the board,
 40 35 and in addition to the fee, may recover from a licensee the
 41  1 costs for the following procedures and associated personnel:
 41  2    Sec. 30.  Section 272C.9, subsection 2, Code 1999, is
 41  3 amended to read as follows:
 41  4    2.  A licensee has a continuing duty to report to the
 41  5 licensing board by whom the person is licensed those acts or
 41  6 omissions specified by rule of the board pursuant to section
 41  7 272C.4, subsection 6, when committed by another person
 41  8 licensed by the same licensing board.  This subsection does
 41  9 not apply to licensees under chapter 542C 542D when the
 41 10 observations are a result of participation in programs of
 41 11 practice review, peer review and quality review conducted by
 41 12 professional organizations of certified public accountants,
 41 13 for educational purposes and approved by the accountancy
 41 14 examining board.
 41 15    Sec. 31.  Section 502.102, subsection 11, paragraph c,
 41 16 subparagraphs (3) and (4), Code Supplement 1999, are amended
 41 17 to read as follows:
 41 18    (3)  An attorney licensed to practice law in this state, a
 41 19 certified public accountant licensed pursuant to chapter 542C
 41 20 542D, a professional engineer licensed pursuant to chapter
 41 21 542B, or a certified teacher, if the person's performance of
 41 22 these services is solely incidental to the practice of the
 41 23 person's profession.
 41 24    (4)  An attorney licensed to practice law in this state or
 41 25 a certified public accountant licensed pursuant to chapter
 41 26 542C 542D who does not do any of the following:
 41 27    Sec. 32.  Section 522.1, subsection 2, Code 1999, is
 41 28 amended to read as follows:
 41 29    2.  A certified public accountant licensed pursuant to
 41 30 chapter 542C 542D.
 41 31    Sec. 33.  Section 546.10, subsection 1, paragraph b, Code
 41 32 1999, is amended to read as follows:
 41 33    b.  The Iowa accountancy examining board created pursuant
 41 34 to chapter 542C 542D.
 41 35    Sec. 34.  Section 546.10, subsection 5, Code 1999, is
 42  1 amended to read as follows:
 42  2    5.  Fees collected under chapters 542B, 542C 542D, 543B,
 42  3 543D, 544A, and 544B shall be paid to the treasurer of state
 42  4 and credited to the general fund of the state.  All expenses
 42  5 required in the discharge of the duties and responsibilities
 42  6 imposed upon the professional licensing division of the
 42  7 department of commerce, the administrator, and the licensing
 42  8 boards by the laws of this state shall be paid from moneys
 42  9 appropriated by the general assembly for those purposes.  All
 42 10 fees deposited into the general fund of the state, as provided
 42 11 in this subsection, shall be subject to the requirements of
 42 12 section 8.60.
 42 13    Sec. 35.  Section 669.14, subsection 11, unnumbered
 42 14 paragraph 1, Code Supplement 1999, is amended to read as
 42 15 follows:
 42 16    Any claim for financial loss based upon an act or omission
 42 17 in financial regulation, including but not limited to
 42 18 examinations, inspections, audits, or other financial
 42 19 oversight responsibilities, pursuant to chapters 87, 203,
 42 20 203A, 203C, 203D, 421B, 486, 487, and 490 through 553,
 42 21 excluding chapters 540A, 542B, 542C 542D, 543B, 543C, 543D,
 42 22 544A, and 544B.
 42 23    Sec. 36.  Chapter 542C, Code 1999, is repealed, effective
 42 24 July 1, 2001.  However, this Act shall not be construed to
 42 25 invalidate or affect any action taken or any proceeding
 42 26 instituted under any law in effect prior to the effective date
 42 27 of this Act.
 42 28    Sec. 37.  CONSTRUCTION.  This Act shall be construed to
 42 29 fully recognize a certificate, license, or permit issued
 42 30 pursuant to chapter 542C prior to July 1, 2001, as though
 42 31 issued under this Act.
 42 32    Sec. 38.  EFFECTIVE DATE.  This Act takes effect July 1,
 42 33 2001.  
 42 34                           EXPLANATION
 42 35    This bill creates a new Code chapter 542D, which
 43  1 establishes certification, permitting, and licensure
 43  2 requirements for accounting professionals in this state.  The
 43  3 bill repeals existing requirements contained in current Code
 43  4 chapter 542C.  The bill is based on model legislation
 43  5 developed jointly by the American institute of certified
 43  6 public accountants and the national association of state
 43  7 boards of accountancy.
 43  8    New Code section 542D.1 sets forth the title of the new
 43  9 Code chapter as the "Iowa Accountancy Act of 2000".
 43 10    New Code section 542D.2 sets forth a statement of
 43 11 legislative intent which is to promote the reliability of
 43 12 information that is used for guidance in financial
 43 13 transactions or for accounting for or assessing the financial
 43 14 status or performance of commercial, noncommercial, and
 43 15 governmental enterprises.
 43 16    New Code section 542D.3 establishes the definitions of
 43 17 terms used in the Code chapter.
 43 18    New Code section 542D.4 establishes the accountancy
 43 19 examining board in a manner similar to current Code chapter
 43 20 542C.
 43 21    New Code section 542D.5 sets forth the qualifications
 43 22 required to be met to be issued a certificate as a certified
 43 23 public accountant.  The Code section requires that an
 43 24 applicant be of good moral character and meet established
 43 25 education, experience, and examination requirements.
 43 26    New Code section 542D.6 establishes the process of
 43 27 application for an initial certificate as a certified public
 43 28 accountant, as well as for renewal and reciprocal issuance of
 43 29 certificates.  This section requires that a licensee shall
 43 30 participate in a program of professional education designed to
 43 31 ensure continuing competence.
 43 32    New Code section 542D.7 provides for the issuance of
 43 33 permits to practice as a certified public accountant firm or
 43 34 accounting practitioner firm upon submission of an application
 43 35 and demonstration of the requirements established in the new
 44  1 Code section.  A person or firm holding a permit to practice
 44  2 issued by this state prior to July 1, 2001, is decreed to have
 44  3 met the requirements of this section.
 44  4    New Code section 542D.8 sets forth the qualifications to be
 44  5 met in order to be issued a license as an accounting
 44  6 practitioner.  This Code section establishes the process of
 44  7 application for the initial license, as well as license
 44  8 renewal.  The Code section provides that a person holding a
 44  9 license as an accounting practitioner issued by this state
 44 10 prior to July 1, 2001, is deemed to have met the requirements
 44 11 of the Code section.
 44 12    New Code section 542D.9 establishes that an application for
 44 13 a certificate, permit, or license to practice by a person or a
 44 14 firm not a resident of the state constitutes appointment of
 44 15 the secretary of state as the applicant's agent upon whom
 44 16 process may be served in any action or proceeding against the
 44 17 applicant arising out of any transaction or operation
 44 18 connected with or incidental to services performed by the
 44 19 applicant within this state.
 44 20    New Code section 542D.10 provides for enforcement of the
 44 21 Code chapter.  The Code section identifies those acts of an
 44 22 individual that may result in revocation, suspension, or other
 44 23 limitation of the individual's certificate, permit, license,
 44 24 or privileges under the Code chapter.  The Code section also
 44 25 provides for an administrative penalty not to exceed $1,000.
 44 26    New Code section 542D.11 provides for the investigations
 44 27 and hearings procedures associated with complaints and
 44 28 violations under the new Code section.
 44 29    New Code section 542D.12 provides for the reinstatement of
 44 30 a license which has been suspended, revoked, or restricted.
 44 31    New Code section 542D.13 provides for the use of titles and
 44 32 the scope of services that a licensee, firm, or nonlicensee
 44 33 may perform under the new Code chapter.  This Code section
 44 34 also provides for the regulation of commission-based services
 44 35 and contingent fee services.  Prohibited acts are delineated.
 45  1    New Code section 542D.14 grants authority to the
 45  2 accountancy examining board to obtain injunctive relief from a
 45  3 court if the board finds that any person or firm has engaged,
 45  4 or is about to engage, in any acts or practices which will
 45  5 constitute a violation of the new Code chapter.  The new Code
 45  6 section also provides for the levying of civil penalties and
 45  7 the issuance of consent orders.
 45  8    New Code section 542D.15 establishes a criminal penalty for
 45  9 a violation of new Code section 542D.13, relating to unlawful
 45 10 acts.  A person who commits such violation is guilty of a
 45 11 serious misdemeanor.
 45 12    New Code section 542D.16 provides that in any action
 45 13 brought to enforce the chapter, evidence of the commission of
 45 14 a single prohibited act is sufficient to justify a penalty,
 45 15 injunction, restraining order, or conviction, without evidence
 45 16 of a general course of conduct.
 45 17    New Code section 542D.17 defines the confidentiality of
 45 18 client communications to accountants.  The new Code section
 45 19 establishes certain instances where such communications may be
 45 20 disclosed.
 45 21    New Code section 542D.18 provides for the retention and
 45 22 management of client records.
 45 23    New Code section 542D.19 provides for reciprocity and
 45 24 discipline for certificate and license holders and permitted
 45 25 firms from states whose accountancy statues are substantially
 45 26 equivalent to the requirements of this new Code chapter.
 45 27    Sections 20 through 35 of the bill make conforming changes
 45 28 relating to the repeal of Code chapter 542C and the creation
 45 29 of Code chapter 542D in this bill.
 45 30    Section 36 of the bill provides for the repeal of existing
 45 31 Code chapter 542C, relating to the regulation of public
 45 32 accountancy, which was originally enacted in 1974.
 45 33    Section 37 of the bill provides for the bill's
 45 34 construction.
 45 35    Section 38 of the bill provides that the bill takes effect
 46  1 on July 1, 2001.  
 46  2 LSB 5121SV 78
 46  3 mj/cf/24.1
     
Text: SF02414                           Text: SF02416
Text: SF02400 - SF02499                 Text: SF Index
Bills and Amendments: General Index     Bill History: General Index

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