Certified public accounting firms, ch 7
ARC 7390C
ACCOUNTANCY EXAMINING BOARD[193A]
Notice of Intended Action
Proposing rulemaking related to certified public accounting firms
and providing an opportunity for public comment
The Accountancy Examining Board hereby proposes to rescind Chapter 7, "Certified Public Accounting Firms," Iowa Administrative Code, and to adopt a new chapter with the same title.
Legal Authority for Rulemaking
This rulemaking is proposed 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.
Purpose and Summary
These proposed amendments implement changes recommended by Executive Order 10. Chapter 7 offers information to acquire and maintain a Certified Public Accountant (CPA) firm license in Iowa. It also offers helpful guidance on when a CPA firm license may or may not be necessary.
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.
Public Comment
Any interested person may submit written comments concerning this proposed rulemaking. Written comments in response to this rulemaking must be received by the Department no later than 4:30 p.m.on January 31, 2024. Comments should be directed to:
Robert E. Lampe Iowa Department of Inspections, Appeals, and Licensing 6200 Park Avenue Des Moines, Iowa 50321 Phone: 515.725.9024 Fax: 515.725.9032 Email: robert.lampe@dia.iowa.gov |
Public Hearing
Public hearings at which persons may present their views orally or in writing will be held as follows:
January 30, 2024 12:30 to 12:50 p.m. |
6200 Park Avenue Des Moines, Iowa Video call link: meet.google.com/yxd-hmkw-ppo Phone numbers: tel.meet/yxd-hmkw-ppo?pin=1779851586643 |
January 31, 2024 12:30 to 12:50 p.m. |
6200 Park Avenue Des Moines, Iowa Video call link: meet.google.com/yxd-hmkw-ppo Phone numbers: tel.meet/yxd-hmkw-ppo?pin=1779851586643 |
The Department may address agenda items out of sequence to accommodate persons appearing before the Department or to aid in the efficiency or effectiveness of the meeting.
All meetings held by the Department are accessible to everyone. Any persons who need special accommodations to participate should call 515.281.0254 (TDD: 1.800.735.2942) as soon as possible in advance of the meeting to ensure sufficient time to make the appropriate accommodations.
Public attendees may make comments at the conclusion of each board director's report.
The boards reserve the right to limit the length of comments based on the number of individuals who wish to speak.
Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking.
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).
The following rulemaking action is proposed:
Item 1. Rescind 193A—Chapter 7 and adopt the following new chapter in lieu thereof:
CHAPTER 7
CERTIFIED PUBLIC ACCOUNTING FIRMS
193A—7.1(542) When licensure is needed.
7.1(1) Except as provided in 193A—Chapter 21, a sole proprietorship, corporation, partnership, limited liability company, or any other form of organization is obligated to apply for a permit to practice as a firm of certified public accountants pursuant to Iowa Code section 542.7.
7.1(2) A firm that is not subject to subrule 7.1(1) may practice public accounting in Iowa in accordance with Iowa Code section 542.7(1)"b."
7.1(3) Unless individual Iowa licensure is needed by a government body or a client, the public accounting services provided by a CPA firm holding an Iowa permit to practice may be performed in Iowa or for a client with a home office in Iowa by Iowa CPAs or wholly by persons exercising a practice privilege under Iowa Code section 542.20.
7.1(4) A CPA firm issued a permit to practice by the board is accountable to the board and subject to discipline by the board for the acts of its owners or other agents, pursuant to 193A—subrule 14.2(4), whether or not such persons are individually licensed by the board.
193A—7.2(542) Application process.
7.2(1) All applications are submitted through the board's online application process. The board will only process fully completed applications accompanied by the proper fee. Each application fee is nonrefundable.
7.2(2) An initial or renewal application for a firm permit to practice may be denied:
a. Pursuant to Iowa Code section 542.7(3)"f";
b. Based on the firm's failure to comply with Iowa Code section 542.7 or a failure to sustain the simple majority of ownership obligations of Iowa Code section 542.7(3); or
c. Based on a regulatory or disciplinary action or to the extent applicable, subject to the limitations and processes set forth at Iowa Code section 272C.15 and corresponding implementing rules located at 193—Chapter 15, criminal conviction described in subrules 7.3(14) and 7.3(15) against any of the firm's licensed or unlicensed owners.
193A—7.3(542) Application contents. Applicants for a firm permit to practice will provide information requested by the board, including:
7.3(1) The lawful name of the firm.
7.3(2) The legal form and jurisdiction of the firm's organization.
7.3(3) Contact information for the principal place of business of the firm and each Iowa office.
7.3(4) All jurisdictions in which the firm is licensed or has applied for licensure.
7.3(5) The names, licensure, and contact information for all persons responsible for supervising attest and compilation service, or responsible for the proper licensure of the firm.
7.3(6) The highest level of public accounting services offered by the firm, such as compilation or attest.
7.3(7) Evidence of satisfactory completion of the last firm peer review, when applicable.
7.3(8) Sufficient information from which the board can determine that a simple majority of owners hold a CPA certificate under Iowa Code section 542.6 or 542.19 or hold a CPA certificate in another state and are eligible to exercise a practice privilege under Iowa Code section 542.20. The board reserves the right to request at any time a full list of owners, or a targeted sublist, such as a list of those persons who perform services from an Iowa office or those who perform attest or compilation services in Iowa or for a client with a home office in Iowa.
7.3(9) The affirmation described in 193A—paragraph 6.3(3)"c."
7.3(10) Affirmation that all CPAs who are responsible for supervising attest services for the CPA firm or who sign or authorize someone to sign the accountant's report on behalf of the CPA firm satisfy the experience or competency standards established by nationally recognized professional standards.
7.3(11) Affirmation that all CPAs or LPAs who are responsible for supervising compilation services or who sign or authorize someone to sign the accountant's compilation report on behalf of the firm comply with nationally recognized professional standards that are applicable to the compilation services performed in Iowa or for a client with a home office in Iowa.
7.3(12) Affirmation that all nonlicensee owners are active participants in the firm or affiliated entity.
7.3(13) Affirmation that the firm and its licensed or unlicensed owners will comply with all applicable Iowa laws and rules, including rules of professional conduct, when practicing in Iowa or for a client with a home office in Iowa.
7.3(14) Details of any past denial, cancellation, revocation, suspension, refusal to renew, or voluntary surrender of a professional license of any kind, authority to practice, or practice privilege by the board or another state agency in any jurisdiction, a federal agency, or the PCAOB, regarding the firm and the firm's current owners (e.g., partners, shareholders, or members).
7.3(15) Details of any past felony conviction or the conviction of any crime, any element of which is dishonesty or fraud, as provided in Iowa Code section 542.5(2), under the laws of any state or the United States, regarding the firm and the firm's current owners (e.g., partners, shareholders, or members).
193A—7.4(542) Renewal procedures.
7.4(1) The permit holder will submit an electronic online renewal by the June 30 deadline each year. Applications are deemed filed on the date of electronic renewal.
7.4(2) The permit holder will list on the renewal application all states in which the applicant has applied for or holds a permit as a certified public accounting firm and list any past denial, revocation, suspension, refusal to renew or voluntary surrender to avoid disciplinary action of a permit to practice or practice privilege. Renewal applications include such additional information as the board needs, including all of the information described in rule 193A—7.3(542).
7.4(3) Within the meaning of Iowa Code chapters 17A, 272C and 542, a timely and sufficient renewal application will be:
a. Received by the board in electronic form on or before June 30;
b. Certified as accurate through the online renewal process;
c. Fully completed and accompanied with the proper fee. The fee will be deemed improper if, for instance, the amount is incorrect, the fee was not included with the application, the credit card number provided by the applicant is incorrect, the date of expiration of a credit card is omitted or incorrect, the attempted credit card transaction is rejected, or the applicant's check is returned for insufficient funds or a closed account.
193A—7.5(542) Failure to renew permit.
7.5(1) A firm that fails to renew the permit by the expiration date, but does so within 30 days following the expiration date, will be assessed a penalty as provided in rule 193A—12.1(542).
7.5(2) If the firm fails to renew the permit within the 30-day grace period outlined in rule 193A—7.6(542), the permit will lapse and the firm will need to reinstate in accordance with rule 193A—7.7(542). The firm is not authorized to practice during the period of time that the permit is lapsed, including the 30-day grace period.
7.5(3) The board may reinstate the permit upon payment of the proper renewal fee and a penalty as provided in rule 193A—12.1(542). A written statement outlining the firm's professional activities during the period of lapsed licensure, including a list of Iowa clients and the services performed, is also needed.
7.5(4) The board may find probable cause to file charges for unlicensed practice if the firm engaged in any activity that obligates licensure pursuant to subrule 7.1(1) during the period of lapsed licensure. In addition to the disciplinary sanctions described in rule 193A—16.3(272C,542), firms found to have practiced public accounting in violation of subrule 7.1(1) on a lapsed license will notify clients upon such terms as the board orders.
193A—7.6(542) Notice to the board. A holder of or applicant for a permit shall notify the board in writing within 30 days pursuant to Iowa Code section 542.7(6).
193A—7.7(542) Noncompliance. The board may grant a reasonable period of time, usually 90 days, for a firm to take such corrective action pursuant to Iowa Code section 542.7(7).
These rules are intended to implement Iowa Code chapters 17A, 272C and 542 and section 546.10.
This notice is now closed for comments. Collection of comments closed on 1/31/2024.
The official published PDF of this document is available from the Iowa General Assembly’s Administrative Rules page.
View the Iowa Administrative Bulletin for 1/10/2024.
The following administrative rule references were added to this document. You may click a reference to view related notices.
Rule 193A-12.1 Rule 193A-14.2(4) Rule 193A-16.3 Rule 193A-6.3(3) Rule 193A-7.1 Rule 193A-7.1(1) Rule 193A-7.2 Rule 193A-7.3 Rule 193A-7.3(14) Rule 193A-7.3(15) Rule 193A-7.4 Rule 193A-7.5 Rule 193A-7.6 Rule 193A-7.7The following Iowa code references were added to this document. You may click a reference to view related notices.
Iowa Code 17A Iowa Code 272C Iowa Code 272C.15 Iowa Code 542 Iowa Code 542.20 Iowa Code 542.5(2) Iowa Code 542.6 Iowa Code 542.7 Iowa Code 542.7(1) Iowa Code 542.7(3) Iowa Code 542.7(6) Iowa Code 542.7(7) Iowa Code 546.10The following keywords and tags were added to this document. You may click a keyword to view related notices.
Application contents Application process Failure to renew permit Noncompliance Notice to the board Renewal procedures When licensure is needed© 2024 State of Iowa | Privacy Policy