ARC 7685C
ACCOUNTANCY EXAMINING BOARD[193A]
Adopted and Filed
Rulemaking related to reciprocity and substantial equivalency
The Accountancy Examining Board hereby rescinds Chapter 9, “Reciprocity and Substantial Equivalency,” Iowa Administrative Code, and adopts a new chapter with the same title.
Legal Authority for Rulemaking
This rulemaking is adopted under the authority provided in Iowa Code section 542.4.
State or Federal Law Implemented
This rulemaking implements, in whole or in part, Iowa Code chapter 542 and Executive Order 10 (January 10, 2023).
Purpose and Summary
These amendments implement changes recommended by Executive Order 10. Chapter 9 provides useful information on substantial equivalency and license by reciprocity. These paths streamline the process for those seeking licensure in other jurisdictions.
Public Comment and Changes to Rulemaking
Notice of Intended Action for this rulemaking was published in the Iowa Administrative Bulletin on January 10, 2024, as ARC 7392C. Public hearings were held on January 30, 2024, and January 31, 2024, at 12:30 p.m.	at 6200 Park Avenue, Des Moines, Iowa. No one attended the public hearings. No public comments were received. No changes from the Notice have been made.
Adoption of Rulemaking
This rulemaking was adopted by the Board on February 15, 2024.
Fiscal Impact
This rulemaking has no fiscal impact to the State of Iowa. No current fees are being changed, and no new fees are being imposed.
Jobs Impact
After analysis and review of this rulemaking, no impact on jobs has been found.
Waivers
Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Department of Inspections, Appeals, and Licensing for a waiver of the discretionary provisions, if any, pursuant to 481—Chapter 6.
Review by Administrative Rules Review Committee
The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6).
Effective Date
This rulemaking will become effective on April 10, 2024.
The following rulemaking action is adopted:
	Item 1. Rescind 193A—Chapter 9 and adopt the following new chapter in lieu thereof:
CHAPTER 9
RECIPROCITY AND SUBSTANTIAL EQUIVALENCY
193A—9.1(542) Iowa CPA certificate necessary. A person who holds a certificate or license to practice as a CPA in another state or a substantially equivalent designation from a foreign jurisdiction may apply to the board for an Iowa CPA certificate and has to do so if the person plans to establish the person’s principal place of business as a CPA in Iowa.
193A—9.2(542) Application forms. Application forms may only be completed and submitted through the online application process. An applicant will attest that all information provided on the form is true and accurate. An application may be denied based on a false statement of material fact. A nonrefundable fee will be charged to each applicant as provided in 193A—Chapter 12.
193A—9.3(542) Background and character.
	9.3(1) An applicant for a CPA certificate under this chapter will disclose on the application all background and character information requested by the board including, but not limited to:
	a. 	All states or foreign jurisdictions in which the applicant has applied for or holds a CPA certificate or license, or a substantially equivalent designation from a foreign country;
	b. 	Any past denial, revocation, suspension, or refusal to renew a CPA certificate, license or permit to practice, or voluntary surrender of a CPA certificate, license or permit to resolve or avoid disciplinary action, or similar actions concerning a substantially equivalent foreign designation;
	c. 	Any other form of discipline imposed against the holder of a CPA certificate, license or permit, or a substantially equivalent foreign designation;
	d. 	The conviction of any felony or any crime described in Iowa Code section 542.5(2);
	e. 	The revocation of a professional license of any kind in this or any other jurisdiction; and
	f. 	Such additional information as the board may request to determine if grounds exist to deny certification under 193A—subrule 3.1(2).
	9.3(2) The board may deny an application based on prior discipline imposed against the holder of a CPA certificate, license or permit, or a substantially equivalent foreign designation, or on any of the grounds listed in 193A—subrule 3.1(2).
193A—9.4(542) Verification of state licensure. An applicant holding a CPA certificate or license from another state or states will submit verification that the applicant’s CPA certificate or license is valid and in good standing in the state in which the applicant’s principal place of business is located. An applicant applying for a CPA certificate under the substantial equivalency provisions of Iowa Code section 542.19(1)“a” and paragraph 9.5(1)“a” may attach a letter of good standing to the application. Such letter of good standing will be prepared by the state in which the applicant’s principal place of business is located and be dated within six months of the date of the application. To expedite the application process, the board will accept verification from another state’s board by facsimile or email. The board reserves the right to request an original verification document directly from another state board.
193A—9.5(542) Qualifications for a CPA certificate.
	9.5(1) A person who holds in good standing a valid CPA certificate or license from another state is deemed qualified for an Iowa CPA certificate if the person satisfies one of the following three conditions:
	a. 	Substantially equivalent state. The licensing standards on education, examination and experience of the state that issued the applicant’s CPA certificate or license were, at the time of licensure, comparable or superior to the education, examination and experience obligations of Iowa Code chapter 542 in effect at the time the application is filed in Iowa. The board may accept the determination of substantial equivalency made by the National Association of State Boards of Accountancy or may make an independent determination of substantial equivalency.
	b. 	Individual substantial equivalency. The applicant’s individual qualifications on education, examination and experience are comparable or superior to the education, examination and experience obligations of Iowa Code chapter 542 in effect at the time the application is filed in Iowa.
	c. 	“Four-in-ten rule.” The applicant satisfies all of the following:
	(1)	The applicant passed the examination necessary for issuance of the applicant’s certificate or license with grades that would have been passing grades at the time in this state.
	(2)	The applicant has had at least four years of experience within the ten years immediately preceding the application that occurred after the applicant passed the examination upon which the CPA certificate or license was based and that in the board’s opinion is substantially equivalent to the obligations set forth in Iowa Code section 542.5(12).
	(3)	If the applicant’s CPA certificate or license was issued more than four years prior to the filing of the application in this state, the applicant has fulfilled the continuing professional education mandates as described in Iowa Code section 542.6(3) and 193A—Chapter 10.
	9.5(2) A person who holds in good standing a certificate, license or designation from a foreign authority that is substantially equivalent to an Iowa CPA certificate is deemed qualified for an Iowa CPA certificate if the person satisfies all of the provisions of Iowa Code section 542.19(3). The burden is on the applicant to demonstrate that such certificate, license or foreign designation is in full force and effect and that the prerequisites for that certificate, license or foreign designation are comparable or superior to those needed for a CPA certificate in this state. Original verification from the foreign authority that issued the certificate, license or designation is needed to demonstrate that such certificate, license or designation is valid and in good standing. If the applicant cannot establish comparable or superior qualifications, the applicant will need to pass the Uniform Certified Public Accountant Examination designed to test the applicant’s knowledge of practice in this state and country. If the applicant is a Canadian Chartered Accountant, Australian Chartered Accountant, Ireland Chartered Accountant, Mexico Contador Público Certificado (CPC), New Zealand Chartered Accountant, Scottish Chartered Accountant, or South African Chartered Accountant, the applicant may be obligated to take the International Qualification Examination (IQEX) in lieu of the uniform certified public accountant examination.
	9.5(3) An applicant seeking an Iowa CPA certificate based on the provisions of paragraph 9.5(1)“b,” paragraph 9.5(1)“c,” or subrule 9.5(2) will submit such supporting information on education, examination or experience as the board deems reasonable to determine whether the applicant qualifies for licensure in Iowa.
193A—9.6(542) Continuing obligations. A person issued a CPA certificate under this chapter is subject to all laws and rules governing persons holding CPA certificates issued in this state including, without limitation, those concerning continuing education, peer review, and notification of crimes and professional discipline. However, a person issued a CPA certificate under this chapter who maintains the principal place of business in a different state and who maintains in good standing a valid CPA certificate or license in that state is deemed to have satisfied the continuing education and peer review obligations described in 193A—Chapters 10 and 11 if the person satisfies similar obligations in the state in which the principal place of business is located.
193A—9.7(542) Expedited application processing. A person applying for a CPA certificate under the substantial equivalency provisions of Iowa Code section 542.19(1)“a” often desires expedited application processing to facilitate cross-border practice. Applications by such persons are especially suitable for rapid processing given the substantially equivalent standards previously enforced in another state. Unless such application reveals grounds to deny the application under subrule 9.3(2), the board is otherwise aware of such grounds, or the application is unaccompanied by the proper fee, the board’s administrator will approve an application that qualifies under Iowa Code section 542.19(1)“a” as rapidly as feasible and deem the effective date of approval to practice in Iowa to be the date the board received the completed application with timely letter of good standing in a substantially equivalent state.
These rules are intended to implement Iowa Code section 542.19.
[Filed 2/15/24, effective 4/10/24]
[Published 3/6/24]
Editor’s Note: For replacement pages for IAC, see IAC Supplement 3/6/24.