1. An accountancy examining board is created within the professional licensing and regulation division of the department of commerce. The board consists of eight members, five of whom shall be certified public accountants, one of whom shall be a licensed accounting practitioner, and two of whom shall not be certified public accountants or licensed accounting practitioners and shall represent the general public. A certified or licensed member shall be actively engaged in practice as a certified public accountant or accounting practitioner and shall have been so engaged for five years preceding appointment, the last two of which shall have been in Iowa. Professional associations or societies composed of certified public accountants or licensed accounting practitioners may recommend the names of potential board members to the governor. However, the governor is not bound by the recommendations. A board member shall not be required to be a member of any professional association or society composed of certified public accountants or licensed accounting practitioners. Members shall be appointed by the governor to staggered terms, subject to confirmation by the senate.
As used in this chapter, "board" means the accountancy examining board established by this section. Upon the expiration of each term, a successor shall be appointed for a term of three years beginning and ending as provided in section 69.19. Members shall serve a maximum of three terms or nine years, whichever is less. Vacancies occurring in the membership of the board for any cause shall be filled in the same manner as original appointments are made by the governor, for the unexpired term and subject to senate confirmation. The public members of the board shall be allowed to participate in administrative, clerical, or ministerial functions incident to giving the examination, but shall not determine the content of the examination or determine the correctness of the answers.
A member of the board whose term has expired shall continue to serve until the member's successor is appointed and qualified.
The governor shall remove from the board any member whose certificate as a certified public accountant has been revoked or suspended.
2. The board shall elect annually a chairperson, a secretary, and a treasurer from its members.
The board shall meet as often as deemed necessary, but shall hold at least one meeting per year at the location of the board's principal office.
The board may adopt regulations for the orderly conduct of its affairs and for the administration of this chapter.
A majority of the members of the board shall constitute a quorum for the transaction of business.
The board shall keep records of its proceedings, and in any proceeding in court arising out of or founded upon any provision of this chapter, copies of its records certified as correct shall be admissible in evidence to prove the contents of the records.
The administrator of the professional licensing and regulation division of the department of commerce shall hire and provide for staff to assist the board with implementing this chapter.
A member of the board is entitled to be reimbursed for actual expenses incurred in the discharge of official duties. Each member of the board may also be eligible to receive compensation as provided in section 7E.6.
3. All fees and other moneys received by the board, pursuant to this chapter, shall be paid monthly to the treasurer of state for deposit in the general fund of the state.
The board shall make a biennial report to the governor of its proceedings, with an account of all moneys received and disbursed, a list of the names of certified public accountants and accounting practitioners whose certificates, permits to practice, or licenses have been revoked or suspended, and other information as it deems proper or the governor requests.
4. The board may adopt rules of professional conduct appropriate to establishing and maintaining high standards of integrity and dignity in the practice as a certified public accountant or accounting practitioner. Rules shall be adopted relating to the following matters:
a. The propriety of opinions on financial statements by a certified public accountant who is not independent.
b. Actions discreditable to the practice as a certified public accountant or accounting practitioner.
c. The professional confidences between a certified public accountant or accounting practitioner and a client.
d. Technical competence and the expression of opinions on financial statements.
e. The failure to disclose a material fact known to the certified public accountant or accounting practitioner.
f. Material misstatement known to the certified public accountant or accounting practitioner.
g. Negligent conduct in an examination or in making a report on an examination.
h. Failure to direct attention to any material departure from generally accepted accounting principles.
5. A certified public accountant or accounting practitioner shall not commit and shall not permit associates or persons who are under the accountant's or practitioner's supervision to commit any of the following acts:
a. Pay a commission, brokerage, or other participation in the fees or profits of professional work directly or indirectly to the laity.
b. Permit others to carry out on behalf of the accountant or practitioner, either with or without compensation, acts which, if carried out by the accountant or practitioner, would place that person in violation of rules of the board adopted pursuant to this chapter.
6. A certified public accountant or accounting practitioner may accept commissions or contingent fees subject to the following:
a. (1) A certified public accountant or accounting practitioner shall not for a commission recommend or refer to a client any product or service, shall not for a commission recommend or refer any product or service to be supplied by a client, and shall not receive a commission from a client, if the certified public accountant or accounting practitioner, or a person associated with the certified public accountant or accounting practitioner in the practice of public accounting, also performs for that client any of the following:
(a) An audit or review of a financial statement.
(b) A compilation of a financial statement if the certified public accountant or accounting practitioner expects, or reasonably might expect, that a third party will use the financial statement, and the compilation report, of which the financial statement is a part, does not disclose a lack of independence.
(c) An examination of prospective financial information.
(2) The prohibition in subparagraph (1) applies during the period in which the certified public accountant or accounting practitioner, or a person associated with the certified public accountant or accounting practitioner in the practice of public accounting, is engaged to perform any of the services listed in subparagraph (1), subparagraph subdivision (a), (b), or (c), and the period covered by any historical financial statements related to such services.
(3) A certified public accountant or accounting practitioner engaged in the practice of public accounting who is not prohibited from performing services for a commission or receiving a commission, and who is paid or expects to be paid a commission, shall disclose that fact to any person or entity to whom the certified public accountant or accounting practitioner recommends or refers a product or service to which the commission relates.
b. A certified public accountant or accounting practitioner engaged in the practice of public accounting shall not receive or agree to receive a contingent fee from a client for either of the following:
(1) Performance of any professional services for a client for whom the certified public accountant or accounting practitioner, or person associated with the public accountant or accounting practitioner in the practice of public accounting, performs any of the following:
(a) An audit or review of a financial statement.
(b) A compilation of a financial statement if the certified public accountant or accounting practitioner expects, or reasonably might expect, that a third party will use the financial statement, and the compilation report, of which the financial statement is a part, does not disclose a lack of independence.
(c) An examination of prospective financial information.
(2) Preparation of an original or amended tax return or claim for a tax refund.
The prohibition in subparagraph (1) applies during the period in which the certified public accountant or accounting practitioner is engaged to perform any of the services listed in subparagraph (1), subparagraph subdivision (a), (b), or (c), and the period covered by any historical financial statements involved related to such services.
c. A certified public accountant or accounting practitioner who accepts a referral fee for recommending or referring any service of a certified public accountant or accounting practitioner to any person or entity, or who pays a referral fee to obtain a client, shall disclose the acceptance or payment of such fee to the client.
d. A fee charged by a certified public accountant or accounting practitioner may vary depending on the complexity of the services rendered.
7. The board shall establish rules relative to the conduct of practice as a certified public accountant and accounting practitioner in respect to the enumerated items in subsections 4, 5, and 6, but this direction is not a limitation upon the rights of the board to make and adopt any rules relating to the conduct of certified public accountants or accounting practitioners which are not specifically enumerated in this chapter.
8. The board may issue further rules and regulations, including but not limited to rules of professional conduct, pertaining to corporations or limited liability companies practicing public accounting, which it deems consistent with or required by the public welfare. The board may prescribe rules governing the style, name, and title of corporations and limited liability companies and governing the affiliation of corporations and limited liability companies with other organizations.
Regulations adopted by the board shall not be in conflict with the Iowa professional corporation Act, provided in chapter 496C, or the limited liability company Act, provided in chapter 490A.
[SS15, § 2620-b, -c, -d, -g, -h; C24, 27, § 1886, 1888, 1889, 1895, 1899, 1900, 1902; C31, 35, § 1905-c1, -c2, -c3, -c4, -c5; C39, § 1905.01--;1905.05; C46, 50, 54, 58, 62, 66, 71, 73, § 116.1--;116.5; C75, 77, 79, 81, § 116.3; 81 Acts, ch 52, § 1]
83 Acts, ch 92, § 1; 86 Acts, ch 1245, § 719--;721; 88 Acts, ch 1158, §21; 88 Acts, ch 1274, §35; 89 Acts, ch 56, §1; 90 Acts, ch 1261, § 37; 91 Acts, ch 97, §9 ~IC93, § 542C.3 ~I93 Acts, ch 19, §2; 94 Acts, ch 1107, §88; 96 Acts, ch 1009, § 2--;5
Referred to in § 542C.21
Iowa General Assembly
Search: Iowa Code 1997
© 1997 Cornell College and League of Women Voters of Iowa
Comments? webmaster@legis.iowa.gov.
Last update: Mon Jan 27 16:05:08 CST 1997
URL: /DOCS/IACODE/1997/542C/3.html
jhf