CHAPTER 20
PRACTICE PRIVILEGE FOR OUT-OF-STATE CERTIFIED PUBLIC ACCOUNTANTS
193A—20.1(542) Overview and timing. Beginning July 1, 2009, out-of-state certified public accountants who maintain their principal place of business in a jurisdiction other than Iowa may practice public accounting in Iowa or for clients with a home office in Iowa without Iowa licensure if all of the conditions of Iowa Code section 542.20 and this chapter are satisfied.
[ARC 7715B, IAB 4/22/09, effective 7/1/09]
193A—20.2(542) Out-of-state licensure status. The practice privilege described in Iowa Code section 542.20 applies to individuals who are licensed to practice as certified public accountants in the jurisdiction in which their principal place of business is located for those periods of time in which all of the following conditions are satisfied:
	20.2(1) The out-of-state license is valid, in good standing, and active. The practice privilege shall cease if the out-of-state license expires in the jurisdiction of the individual’s principal place of business.
	20.2(2) The individual meets the criteria for substantial equivalency reciprocity, as provided in Iowa Code section 542.19, subsection 1, paragraph “a,” “b,” or “c,” and 193A—9.5(542).
	20.2(3) The license authorizes in the individual’s principal place of business all of the public accounting services the individual performs or offers to perform in Iowa or for clients with a home office in Iowa.
[ARC 7715B, IAB 4/22/09, effective 7/1/09]
193A—20.3(542) When Iowa licensure may be required.
	20.3(1) The auditor of state, the department of agriculture and land stewardship, other governmental official or body, or a client may require that an individual be licensed in Iowa as a condition of performing public accounting services in Iowa or for a client with a home office in Iowa, whether or not the individual may otherwise satisfy the conditions for a practice privilege. Iowa licensure as a certified public accountant is required, for example, to perform certain audit services described in Iowa Code chapter 11.
	20.3(2) Iowa licensure is required if an individual has an office in Iowa at which the individual uses the title “CPA,” unless the individual satisfies the conditions for a practice privilege and one of the following is true:
	a. 	The Iowa office is the office of an Iowa CPA or LPA firm that holds a permit to practice under Iowa Code section 542.7 or 542.8, and the individual provides public accounting services through that firm.
	b. 	The Iowa office is the office of a business entity that is not required to hold a firm permit to practice under Iowa Code section 542.7 or 542.8, and the individual provides public accounting services through that business entity.
	20.3(3) Iowa licensure is required if an individual moves the individual’s principal place of business to Iowa and is otherwise required to be licensed under Iowa Code chapter 542. The board’s streamlined application process for reciprocal licensure is described in Iowa Code section 542.19 and 193A—Chapter 9.
[ARC 7715B, IAB 4/22/09, effective 7/1/09]
193A—20.4(542) Individuals ineligible for a practice privilege.
	20.4(1) The practice privilege described in Iowa Code section 542.20 shall not be applicable if:
	a. 	The individual has been convicted of a felony under the laws of any jurisdiction.
	b. 	The individual has been convicted of any crime under the laws of any jurisdiction if an element of the crime involves dishonesty or fraud, such as forgery, embezzlement, obtaining money under false pretenses, theft, extortion, conspiracy to defraud, or similar offense, as more fully described in Iowa Code section 542.5(2).
	c. 	The individual’s license to practice public accounting has been suspended, revoked, or otherwise disciplined by a licensing authority in this or another state, territory, or country, for any cause other than failure to pay appropriate fees. “Disciplined” shall include the voluntary surrender of a license to resolve a pending disciplinary investigation or proceeding in Iowa or another jurisdiction.
	d. 	The individual’s right to practice public accounting before any state or federal agency, or the PCAOB, has been suspended or revoked.
	e. 	The individual has applied for licensure as a certified public accountant in Iowa or another jurisdiction and the application has been denied.
	f. 	Civil penalties have been imposed against the individual pursuant to Iowa Code section 542.14.
	g. 	The individual’s authority to exercise a practice privilege has been revoked in Iowa or another jurisdiction.
	20.4(2) Individuals precluded from exercising a practice privilege under this rule may apply for licensure in Iowa if otherwise qualified. The board will determine when an application is submitted whether the criminal or disciplinary history or other regulatory action provides a ground to deny licensure.
[ARC 7715B, IAB 4/22/09, effective 7/1/09]
193A—20.5(542) Attest and compilation services.
	20.5(1) Individuals providing audit, review or other attest services in Iowa or for a client with a home office in Iowa must practice through a CPA firm that holds an active permit to practice pursuant to Iowa Code section 542.7 or through an out-of-state CPA firm exercising a practice privilege with a home office in Iowa without first obtaining a firm permit to practice in Iowa as long as the out-of-state firm is validly licensed in the state of its principal place of business, complies with Iowa Code sections 542.20(5) and 542.20(6) and associated rules, and complies with the peer review and ownership provisions of Iowa Code section 542.7. Unless Iowa certification is specifically required by a governmental body or client, individual CPAs performing such attest services through an out-of-state CPA firm may either hold an active Iowa CPA certificate or exercise a practice privilege as more fully described in Iowa Code section 542.20. Individuals who provide such attest services in Iowa or for a client with a home office in Iowa through an out-of-state CPA firm exercising a practice privilege must provide such services through a certified public accounting firm that is validly licensed in the state of its principal place of business, complies with Iowa Code sections 542.20(5) and 542.20(6) and associated rules, and complies with the peer review and ownership provisions of Iowa Code section 542.7.
	20.5(2) Individuals providing compilation services in Iowa or for a client with a home office in Iowa must comply with the peer review provisions of Iowa Code section 542.6(6), or provide such services through a CPA or LPA firm, or a substantially equivalent firm that holds a valid license in the firm’s principal place of business and that complies with the peer review and ownership provisions of Iowa Code section 542.7 or 542.8.
[ARC 7715B, IAB 4/22/09, effective 7/1/09; ARC 0413C, IAB 10/31/12, effective 12/5/12; ARC 3422C, IAB 10/25/17, effective 11/29/17]
193A—20.6(542) Rights and duties.
	20.6(1) Individuals who satisfy the conditions for a practice privilege may practice public accounting in Iowa or for a client with a home office in Iowa in person, or by telephone, mail, or electronic means without licensure under Iowa Code chapter 542 or notice to the board.
	20.6(2) Individuals lawfully practicing public accounting under a practice privilege may use the title “CPA” as long as they do not have an office in Iowa, except as provided in subrule 20.3(2).
	20.6(3) Individuals practicing public accounting in Iowa or for a client with a home office in Iowa while exercising a practice privilege are subject to all of the following provisions:
	a. 	Practice privilege practitioners shall not make any representation tending to falsely indicate that the individuals are licensed under Iowa Code chapter 542. Such individuals may truthfully identify themselves as licensed in any jurisdiction in which they hold a valid, active, unexpired license to practice as a certified public accountant. For example, a practice privilege practitioner could not use the title “Iowa CPA” or otherwise state or imply licensure in Iowa, but, if true, the individual could use a title such as “CPA, licensed in Texas” or “Florida CPA.” Such individuals could also truthfully state that they are CPAs practicing under a practice privilege.
	b. 	Practice privilege practitioners shall provide, upon a client’s or prospective client’s request, accurate information on the state or states of licensure, principal place of business, contact information, and manner in which licensure status can be verified.
	c. 	Practice privilege practitioners shall comply with all professional standards, laws, and rules that apply to licensees performing the same professional services.
	20.6(4) As a condition of exercising the practice privilege provided in Iowa Code section 542.20, the individual:
	a. 	Consents to the personal and subject matter jurisdiction and regulatory authority of the board including, but not limited to, the board’s jurisdiction to revoke the practice privilege or otherwise take action under Iowa Code section 542.14 for any violation of Iowa Code chapter 542 or board rules;
	b. 	Appoints the regulatory body of the state that issued the license in the individual’s principal place of business as the agent upon whom process may be served in any action or proceeding by the board against the individual;
	c. 	Agrees to supply the board, upon the board’s request and without subpoena, such information or records licensees are similarly required to provide the board under Iowa Code chapter 542, including but not limited to the information described in Iowa Code section 542.20, subsection 7, paragraph “c”; and
	d. 	Agrees to promptly cease offering or providing public accounting services in Iowa or for a client with a home office in Iowa if the license in the individual’s principal place of business expires or is otherwise no longer in good standing, or if any of the conditions for exercising the practice privilege are no longer satisfied, or if the board revokes the practice privilege.
[ARC 7715B, IAB 4/22/09, effective 7/1/09]
193A—20.7(542) Penalties.
	20.7(1) Individuals purporting to practice public accounting under a practice privilege who are ineligible to exercise a practice privilege or who fail to satisfy the conditions for exercising a practice privilege are subject to all of the penalties that apply to unlicensed persons, including the criminal, administrative, and civil penalties described in Iowa Code sections 542.14 and 542.15.
	20.7(2) If an individual acting or purporting to act under a practice privilege engages in any act or practice that does or may in the future violate Iowa Code chapter 542 or board rules, the board may take any or all of the following actions, as applicable:
	a. 	Apply to the district court for an injunction, restraining order, or other order, pursuant to Iowa Code section 542.14(1);
	b. 	Issue an order to require compliance with Iowa Code chapter 542 or board rules, impose a civil penalty up to $1,000 per offense, which may be imposed per day for a continuing violation, and revoke the practice privilege, pursuant to the procedures outlined in Iowa Code section 542.14, subsections 2 to 5, and 193A—Chapter 17;
	c. 	Deny the subsequent license application of the violator or the violator’s firm, pursuant to Iowa Code section 542.20, subsection 4, paragraphs “a” and “b”;
	d. 	Refer the complaint or other relevant information to the jurisdiction that issued a license to the alleged violator; and
	e. 	Take disciplinary action against the individual pursuant to Iowa Code section 542.10 if the individual holds an inactive or lapsed Iowa license.
	20.7(3) Complaints filed with the board alleging violations by individuals who are not licensed by the board, including those acting or purporting to act under a practice privilege, are not confidential under Iowa Code section 272C.6(4) and shall not be treated as confidential unless otherwise provided in Iowa Code chapter 22 or other applicable law.
	20.7(4) Persons filing complaints with the board against individuals acting or purporting to act under a practice privilege should provide as much information as possible to assist the board in locating the individual and in determining whether the individual is licensed in any jurisdiction.
[ARC 7715B, IAB 4/22/09, effective 7/1/09]
193A—20.8(542) Relationship between Iowa licensure and the exercise of a practice privilege.
	20.8(1) Active Iowa licensees. An Iowa licensee holding an active CPA certificate shall be treated for all purposes as an Iowa licensee and shall not be subject to the provisions of Iowa Code section 542.20.
	20.8(2) Inactive Iowa licensees. An Iowa licensee holding an inactive CPA certificate is precluded by Iowa Code section 542.6(3) and rule 193A—5.9(272C,542) from performing attest or compilation services or using the title “CPA” while performing public accounting services in Iowa or for a client with a home office in Iowa. The practice of an inactive CPA is restricted because the continuing education required to renew in active status does not apply to those renewing in inactive status. Some individuals holding an inactive Iowa CPA certificate may, however, hold an active CPA certificate in another jurisdiction in which they maintain their principal place of business and satisfy continuing education requirements. Such individuals may have maintained an inactive Iowa CPA certificate solely to facilitate reinstatement to active status when active Iowa licensure is required in their practice. The following provisions shall apply to inactive Iowa licensees who may wish to exercise a practice privilege:
	a. 	In a disciplinary investigation or proceeding in which an inactive Iowa licensee is alleged to have improperly used the title “CPA” or otherwise practiced public accounting on an inactive license, the board shall take into consideration whether the inactive licensee, at the time of the events at issue, satisfied the conditions for a practice privilege under Iowa Code section 542.20 and complied with all rules applicable to the exercise of a practice privilege.
	b. 	The individual shall take care to avoid public confusion about licensure status as provided in 193A—subrule 5.1(6).
	c. 	Violations of Iowa laws or rules by an individual holding an inactive Iowa CPA certificate shall be prosecuted as disciplinary proceedings against a licensee under Iowa Code section 542.10 and, when appropriate under the factual circumstances, may also or alternatively be enforced under the provisions of Iowa Code sections 542.14 and 542.15.
	20.8(3) Lapsed Iowa licensees. An Iowa licensee holding a lapsed Iowa CPA certificate is not authorized to perform attest or compilation services or to otherwise practice public accounting using the title “CPA” in Iowa or for a client with a home office in Iowa. A lapsed licensee is subject to discipline for practicing on a lapsed license and may not represent oneself as a “CPA” in any context unless the licensee truthfully discloses that the certificate has lapsed. Some individuals holding lapsed Iowa CPA certificates may, however, hold active CPA certificates in another jurisdiction in which the individuals maintain their principal place of business. Such individuals may have intentionally allowed their Iowa CPA certificates to lapse because the individuals no longer need an active Iowa license in their practice. The following provisions shall apply to lapsed Iowa licensees who may wish to exercise a practice privilege:
	a. 	In a disciplinary investigation or proceeding in which a lapsed Iowa licensee is alleged to have improperly used the title “CPA” or otherwise practiced public accounting on a lapsed license, the board shall take into consideration whether the lapsed licensee, at the time of the events at issue, satisfied the conditions for a practice privilege under Iowa Code section 542.20 and complied with all rules applicable to the exercise of a practice privilege.
	b. 	The individual shall take care to avoid public confusion about licensure status as provided in 193A—subrule 5.1(6).
	c. 	Violations of Iowa laws or rules by an individual holding a lapsed Iowa CPA certificate shall be prosecuted as disciplinary proceedings against a licensee under Iowa Code section 542.10 and, when appropriate under the factual circumstances, may also or alternatively be prosecuted under the provisions of Iowa Code sections 542.14 and 542.15.
	20.8(4) Former Iowa licensees. An individual who held an Iowa CPA certificate at one time whose Iowa CPA certificate has been revoked or surrendered in connection with a disciplinary investigation or proceeding is prohibited from performing attest or compilation services or using the title “CPA” whether or not such individual may otherwise qualify for a practice privilege.
	a. 	The former Iowa licensees described in this subrule are ineligible to exercise the practice privilege described in Iowa Code section 542.20.
	b. 	Violations of Iowa Code chapter 542 or board rules by former Iowa licensees are subject to the criminal, civil and administrative remedies described in Iowa Code sections 542.14 and 542.15, and may also be prosecuted as disciplinary proceedings under Iowa Code section 542.10 if the license remains subject to reinstatement under Iowa Code section 542.12.
[ARC 7715B, IAB 4/22/09, effective 7/1/09]
These rules are intended to implement Iowa Code section 542.20.
[Filed ARC 7715B (Notice ARC 7484B, IAB 1/14/09), IAB 4/22/09, effective 7/1/09]
[Filed ARC 0413C (Notice ARC 0254C, IAB 8/8/12), IAB 10/31/12, effective 12/5/12]
[Filed ARC 3422C (Notice ARC 3224C, IAB 8/2/17), IAB 10/25/17, effective 11/29/17]