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House Study Bill 695 - IntroducedA Bill ForAn Act 1relating to the auditor of state and including effective
2date and applicability provisions.
3BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. NEW SECTION. 11.31A Auditor of state —
2divisions — continuing education.
31. The auditor of state shall adopt rules establishing
4divisions within the office of auditor of state. For each
5division within the office of auditor of state that is
6responsible for performing attest services as described in
7section 542.3, the auditor of state shall appoint a deputy
8auditor of state, subject to confirmation by the senate, that
9is a certified public accountant to lead that division. Each
10deputy auditor of state shall do all of the following:
11a. Perform attest services that would otherwise be performed
12by the auditor of state.
13b. Review and supervise each assistant auditor within the
14division headed by the deputy auditor of state.
152. If the auditor of state is not a certified public
16accountant licensed pursuant to chapter 542, the auditor of
17state shall not sign an accountant’s report issued by the
18office of auditor of state, but shall defer to the appropriate
19deputy auditor of state who meets the experience or competency
20requirements set out in nationally recognized professional
21standards for such services.
223. The auditor of state shall complete such annual
23continuing education requirements as are required of a
24certified public accountant licensed pursuant to chapter 542.
254. The auditor of state shall comply with all applicable
26rules of professional conduct adopted by the Iowa accountancy
27examining board pursuant to section 542.4.
28 Sec. 2. Section 542.3, subsection 20, Code 2022, is amended
29to read as follows:
3020. “Peer review records” means a file, report, or other
31information relating to the professional competence of
32an applicant in the possession of a peer review team, or
33information concerning the peer review developed by a peer
34review team in the possession of an applicant. “Peer review
35records” includes peer review reports.
-1-1 Sec. 3. Section 542.3, Code 2022, is amended by adding the
2following new subsection:
3 NEW SUBSECTION. 20A. “Peer review reports” means a study,
4appraisal, or review of one or more aspects of a certified
5public accounting firm’s compliance with applicable accounting,
6auditing, and other attestation standards adopted by generally
7recognized standard-setting bodies.
8 Sec. 4. Section 542.7, subsection 4, Code 2022, is amended
9to read as follows:
104. An applicant for initial issuance or renewal of a permit
11to practice as a certified public accounting firm is required
12to register each office of the firm within this state with the
13board and to show that all attest and compilation services
14rendered in this state are under the charge of a person holding
15a valid certificate issued under section 542.6 or 542.19, or
16by another state if the holder has a practice privilege under
17section 542.20. However, the requirements of this subsection
18shall not apply to the office of auditor of state if the
19auditor of state otherwise complies with the requirements of
20section 11.31A and this section.
21 Sec. 5. Section 542.7, subsection 10, Code 2022, is amended
22to read as follows:
2310. a. Peer review records are privileged and confidential,
24and are not subject to discovery, subpoena, or other means
25of legal compulsion. Peer review records are not admissible
26in evidence in a judicial, administrative, or arbitration
27proceeding. Unless the subject of a peer review timely objects
28in writing to the administering entity of the peer review
29program, the administering entity shall make available to the
30board within thirty days of the issuance of the peer review
31acceptance letter the final peer review report or such peer
32review records as are designated by the peer review program in
33which the administering entity participates. The subject of a
34peer review may voluntarily submit the final peer review report
35directly to the board. Information or documents discoverable
-2-1from sources other than a peer review team do not become
2nondiscoverable from such other sources because they are made
3available to or are in the possession of a peer review team.
4Information or documents publicly available from the American
5institute of certified public accountants relating to quality
6or peer review are not privileged or confidential under this
7subsection. A person or organization participating in the
8peer review process shall not testify as to the findings,
9recommendations, evaluations, or opinions of a peer review team
10in a judicial, administrative, or arbitration proceeding.
11b. However, notwithstanding any provision of this subsection
12to the contrary, peer review reports concerning the office of
13auditor of state shall be considered a public record pursuant
14to chapter 22.
15 Sec. 6. NEW SECTION. 542.7A Office of auditor of state.
161. The office of auditor of state shall qualify as a
17certified public accounting firm subject to the requirements of
18sections 11.31, 11.31A, and 542.7.
192. For purposes of section 542.7, the auditor of state shall
20be deemed to be the owner of the office of auditor of state and
21the office of auditor of state shall be deemed to comply with
22the ownership requirements of section 542.7 if the auditor of
23state is a certified public accountant or all divisions of the
24office of auditor of state performing attest services are led
25by a certified public accountant.
263. The provisions of sections 542.9, 542.17, and 542.18
27shall not apply to the office of auditor of state as a
28certified public accounting firm under this chapter.
29 Sec. 7. EFFECTIVE DATE. This Act, being deemed of immediate
30importance, takes effect upon enactment.
31 Sec. 8. RETROACTIVE APPLICABILITY. This Act applies
32retroactively to July 1, 2002.
33EXPLANATION
34The inclusion of this explanation does not constitute agreement with
35the explanation’s substance by the members of the general assembly.
-3- 1This bill concerns the office of auditor of state.
2The bill requires that the auditor of state adopt rules
3establishing divisions and to provide that for each division
4that is responsible for performing attest services as described
5in Code section 542.3, the auditor of state shall appoint a
6certified public accountant to lead that division, who shall
7be subject to confirmation by the senate. The bill requires a
8deputy auditor of state who meets the experience or competency
9requirements set out in nationally recognized professional
10standards to sign an accountant’s report if the auditor of
11state is not a certified public accountant. The bill also
12requires the auditor of state to complete the continuing
13education requirements and comply with the applicable rules of
14professional conduct required for certified public accountants.
15Code chapter 542, concerning public accountants, is amended.
16The bill adds “peer review reports”, defined in the bill, to
17the definition of “peer review records”. By operation of
18law, peer review records are privileged, confidential, and
19not subject to discovery or other means of legal compulsion.
20New Code section 542.7A provides that the office of auditor
21of state shall qualify as a certified public accounting firm
22subject to the requirements of Code sections 11.31 and 542.7.
23The bill provides that for purposes of applying for a permit as
24a certified public accounting firm under Code section 542.7,
25the auditor of state shall be deemed the owner of the office
26and the office of auditor of state shall be deemed to comply
27with the ownership requirements of Code section 542.7 if the
28auditor of state is a certified public accountant or all
29divisions of the office of auditor of state performing attest
30services are led by a certified public accountant. The bill
31provides that Code section 542.9, concerning appointment of
32secretary of state as an agent, and Code sections 542.17 and
33542.18, concerning client confidentiality, do not apply to the
34office of auditor of state if the office of auditor of state is
35issued a permit as a certified public accounting firm.
-4- 1Code section 542.7, concerning firm permits to practice,
2is amended. The bill provides that the requirements of an
3applicant to register each office of the firm within the state
4with the Iowa accountancy examining board and to show that all
5attest and compilation services rendered in this state are
6under the charge of a person holding a valid certificate do
7not apply to the office of auditor of state. In addition, the
8bill provides that peer review records concerning the office of
9auditor of state shall be considered a public record pursuant
10to Code chapter 22.
11The bill takes effect upon enactment and applies
12retroactively to July 1, 2002.
-5-ss/rn
2date and applicability provisions.
3BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. NEW SECTION. 11.31A Auditor of state —
2divisions — continuing education.
31. The auditor of state shall adopt rules establishing
4divisions within the office of auditor of state. For each
5division within the office of auditor of state that is
6responsible for performing attest services as described in
7section 542.3, the auditor of state shall appoint a deputy
8auditor of state, subject to confirmation by the senate, that
9is a certified public accountant to lead that division. Each
10deputy auditor of state shall do all of the following:
11a. Perform attest services that would otherwise be performed
12by the auditor of state.
13b. Review and supervise each assistant auditor within the
14division headed by the deputy auditor of state.
152. If the auditor of state is not a certified public
16accountant licensed pursuant to chapter 542, the auditor of
17state shall not sign an accountant’s report issued by the
18office of auditor of state, but shall defer to the appropriate
19deputy auditor of state who meets the experience or competency
20requirements set out in nationally recognized professional
21standards for such services.
223. The auditor of state shall complete such annual
23continuing education requirements as are required of a
24certified public accountant licensed pursuant to chapter 542.
254. The auditor of state shall comply with all applicable
26rules of professional conduct adopted by the Iowa accountancy
27examining board pursuant to section 542.4.
28 Sec. 2. Section 542.3, subsection 20, Code 2022, is amended
29to read as follows:
3020. “Peer review records” means a file, report, or other
31information relating to the professional competence of
32an applicant in the possession of a peer review team, or
33information concerning the peer review developed by a peer
34review team in the possession of an applicant. “Peer review
35records” includes peer review reports.
-1-1 Sec. 3. Section 542.3, Code 2022, is amended by adding the
2following new subsection:
3 NEW SUBSECTION. 20A. “Peer review reports” means a study,
4appraisal, or review of one or more aspects of a certified
5public accounting firm’s compliance with applicable accounting,
6auditing, and other attestation standards adopted by generally
7recognized standard-setting bodies.
8 Sec. 4. Section 542.7, subsection 4, Code 2022, is amended
9to read as follows:
104. An applicant for initial issuance or renewal of a permit
11to practice as a certified public accounting firm is required
12to register each office of the firm within this state with the
13board and to show that all attest and compilation services
14rendered in this state are under the charge of a person holding
15a valid certificate issued under section 542.6 or 542.19, or
16by another state if the holder has a practice privilege under
17section 542.20. However, the requirements of this subsection
18shall not apply to the office of auditor of state if the
19auditor of state otherwise complies with the requirements of
20section 11.31A and this section.
21 Sec. 5. Section 542.7, subsection 10, Code 2022, is amended
22to read as follows:
2310. a. Peer review records are privileged and confidential,
24and are not subject to discovery, subpoena, or other means
25of legal compulsion. Peer review records are not admissible
26in evidence in a judicial, administrative, or arbitration
27proceeding. Unless the subject of a peer review timely objects
28in writing to the administering entity of the peer review
29program, the administering entity shall make available to the
30board within thirty days of the issuance of the peer review
31acceptance letter the final peer review report or such peer
32review records as are designated by the peer review program in
33which the administering entity participates. The subject of a
34peer review may voluntarily submit the final peer review report
35directly to the board. Information or documents discoverable
-2-1from sources other than a peer review team do not become
2nondiscoverable from such other sources because they are made
3available to or are in the possession of a peer review team.
4Information or documents publicly available from the American
5institute of certified public accountants relating to quality
6or peer review are not privileged or confidential under this
7subsection. A person or organization participating in the
8peer review process shall not testify as to the findings,
9recommendations, evaluations, or opinions of a peer review team
10in a judicial, administrative, or arbitration proceeding.
11b. However, notwithstanding any provision of this subsection
12to the contrary, peer review reports concerning the office of
13auditor of state shall be considered a public record pursuant
14to chapter 22.
15 Sec. 6. NEW SECTION. 542.7A Office of auditor of state.
161. The office of auditor of state shall qualify as a
17certified public accounting firm subject to the requirements of
18sections 11.31, 11.31A, and 542.7.
192. For purposes of section 542.7, the auditor of state shall
20be deemed to be the owner of the office of auditor of state and
21the office of auditor of state shall be deemed to comply with
22the ownership requirements of section 542.7 if the auditor of
23state is a certified public accountant or all divisions of the
24office of auditor of state performing attest services are led
25by a certified public accountant.
263. The provisions of sections 542.9, 542.17, and 542.18
27shall not apply to the office of auditor of state as a
28certified public accounting firm under this chapter.
29 Sec. 7. EFFECTIVE DATE. This Act, being deemed of immediate
30importance, takes effect upon enactment.
31 Sec. 8. RETROACTIVE APPLICABILITY. This Act applies
32retroactively to July 1, 2002.
33EXPLANATION
34The inclusion of this explanation does not constitute agreement with
35the explanation’s substance by the members of the general assembly.
-3- 1This bill concerns the office of auditor of state.
2The bill requires that the auditor of state adopt rules
3establishing divisions and to provide that for each division
4that is responsible for performing attest services as described
5in Code section 542.3, the auditor of state shall appoint a
6certified public accountant to lead that division, who shall
7be subject to confirmation by the senate. The bill requires a
8deputy auditor of state who meets the experience or competency
9requirements set out in nationally recognized professional
10standards to sign an accountant’s report if the auditor of
11state is not a certified public accountant. The bill also
12requires the auditor of state to complete the continuing
13education requirements and comply with the applicable rules of
14professional conduct required for certified public accountants.
15Code chapter 542, concerning public accountants, is amended.
16The bill adds “peer review reports”, defined in the bill, to
17the definition of “peer review records”. By operation of
18law, peer review records are privileged, confidential, and
19not subject to discovery or other means of legal compulsion.
20New Code section 542.7A provides that the office of auditor
21of state shall qualify as a certified public accounting firm
22subject to the requirements of Code sections 11.31 and 542.7.
23The bill provides that for purposes of applying for a permit as
24a certified public accounting firm under Code section 542.7,
25the auditor of state shall be deemed the owner of the office
26and the office of auditor of state shall be deemed to comply
27with the ownership requirements of Code section 542.7 if the
28auditor of state is a certified public accountant or all
29divisions of the office of auditor of state performing attest
30services are led by a certified public accountant. The bill
31provides that Code section 542.9, concerning appointment of
32secretary of state as an agent, and Code sections 542.17 and
33542.18, concerning client confidentiality, do not apply to the
34office of auditor of state if the office of auditor of state is
35issued a permit as a certified public accounting firm.
-4- 1Code section 542.7, concerning firm permits to practice,
2is amended. The bill provides that the requirements of an
3applicant to register each office of the firm within the state
4with the Iowa accountancy examining board and to show that all
5attest and compilation services rendered in this state are
6under the charge of a person holding a valid certificate do
7not apply to the office of auditor of state. In addition, the
8bill provides that peer review records concerning the office of
9auditor of state shall be considered a public record pursuant
10to Code chapter 22.
11The bill takes effect upon enactment and applies
12retroactively to July 1, 2002.
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