Current through Register Vol. 46, No. 19, March 20, 2024
The board may initiate disciplinary action against a CPA, an LPA,
or a firm of CPAs or LPAs that holds an active, inactive or lapsed certificate,
license or permit to practice on any of the following grounds:
(1)
Fraud or deceit in procuring a
license. Fraud or deceit in procuring or attempting to procure an
initial, reciprocal, renewal, or reinstated certificate, license, or permit to
practice includes any intentional perversion of the truth when submitting an
application to the board, or when submitting information in support of another's
application to the board, including:
a. False
representation of a material fact, whether by word or by conduct, by false or
misleading allegation, or by concealment of that which should have been
disclosed.
b. Attempting to file or
filing with the board any false or forged record or document, such as a college
transcript, diploma or degree, examination report, verification of licensure,
continuing education certificate, or verification of peer review.
c. Failing or refusing to provide complete
information in response to a question on an application.
d. Reporting information, such as satisfaction
of continuing education, peer review, or attest qualification, in a false manner
through overt deceit or with reckless disregard for the truth or accuracy of the
information asserted.
e. Otherwise
participating in any form of fraud or misrepresentation by act or
omission.
(2)
Professional incompetence. Professional incompetence includes,
but is not limited to:
a. A substantial lack of
knowledge or ability to discharge professional obligations within the practice of
public accounting.
b. A substantial
deviation from the standards of learning or skill ordinarily possessed and
applied by other practitioners in the state of Iowa acting in the same or similar
circumstances.
c. A failure to
exercise the degree of care ordinarily exercised by the average practitioner
acting in the same or similar circumstances.
d. Failure to conform to the minimum standards
of acceptable and prevailing practice of public accounting in this
state.
e. A willful, repeated, or
material deviation from generally accepted engagement standards, generally
accepted accounting standards, generally accepted auditing standards, or any
other nationally recognized standard applicable to the public accounting services
at issue.
f. Any other act or
omission that demonstrates an inability to safely practice in a manner protective
of the public's interest.
(3)
Deceptive practices.
Deceptive practices are grounds for discipline, whether or not actual injury is
established, and include:
a. Knowingly making
misleading, deceptive, untrue or fraudulent representations in the practice of
public accounting.
b. Use of
untruthful or improbable statements in advertisements. Use of untruthful or
improbable statements in advertisements includes, but is not limited to, an
action by a licensee in making information or intention known to the public that
is false, deceptive, misleading or promoted through fraud or
misrepresentation.
c. Acceptance of
any fee by fraud or misrepresentation.
d. Falsification of business or client
records.
e. Submission of false or
misleading reports or information to the board including information supplied in
an audit of continuing education, reports submitted as a condition of probation,
or any reports identified in this rule or 193A-Chapter 18.
f. Knowingly presenting as one's own a
certificate or certificate number, license or license number, permit or permit
number, or signature, when the above belongs to another or a fictitious licensee;
or otherwise falsely impersonating a person holding a CPA certificate, an LPA
license, or a permit to practice as a firm of CPAs or LPAs.
g. Representing oneself as a CPA, LPA, CPA
firm, or LPA firm when the certificate, license, or permit to practice has been
suspended, revoked, surrendered, or placed on inactive status, or has lapsed,
except as allowed under Iowa Code section 542.20.
h. Fraud in representations as to skill or
ability.
(4)
Unethical, harmful or detrimental conduct. Licensees engaging in
unethical conduct or practices harmful or detrimental to the public may be
disciplined whether or not injury is established. Behaviors and conduct that are
unethical, harmful or detrimental to the public may include, but are not limited
to, the following actions:
a. Verbal or physical
abuse, or improper sexual contact, if such behavior occurs within the practice of
public accounting or if such behavior otherwise provides a reasonable basis for
the board to conclude that such behavior within the practice of public accounting
would place the public at risk.
b. A
violation of a rule of professional conduct relating to improper conflicts of
interest, or lack of integrity, objectivity or independence, as provided in the
AICPA Code of Professional Conduct.
c. A violation of a provision of Iowa Code
section 542.13, or aiding or abetting any unlawful activity for which a civil
penalty can be imposed under Iowa Code sections 542.13 and
542.14.
(5)
Lack of
proper qualifications. Lack of proper qualifications includes, but is
not limited to:
a. Continuing to practice as a
CPA or LPA without satisfying the continuing education necessary for certificate
or license renewal.
b. Continuing to
perform attest services or compilation services without timely completion of peer
review.
c. Performing attest services
as an individual without proper certification or attest qualification, or without
acting through a CPA firm holding a permit to practice pursuant to Iowa Code
section 542.7 or exercising a practice privilege pursuant to Iowa Code section
542.20.
d. Performing attest services
as a firm without holding a permit to practice pursuant to Iowa Code section
542.7 or exercising a practice privilege pursuant to Iowa Code section 542.20, or
without ensuring that the individuals responsible for supervising attest services
or signing or authorizing someone to sign the accountant's report are
attest-qualified, hold the necessary certification or are eligible to exercise a
practice privilege, or otherwise performing attest services in a manner
inconsistent with Iowa Code chapter 542 or the rules of the board.
e. Habitual intoxication or addiction to the
use of drugs, or impairment that adversely affects the CPA's or LPA's ability to
practice in a safe and competent manner.
f. Any act, conduct, or condition, including
lack of education or experience and careless or intentional acts or omissions,
that demonstrates a lack of qualifications that are necessary to ensure a high
standard of professional care as provided in Iowa Code section
272C.3(2)
"b," or that impairs a practitioner's ability to safely
and skillfully practice the profession.
(6)
Negligence in the practice of
public accounting. Negligence in the practice of public accounting
includes the following acts, practices, or omissions, whether or not injury
results:
a. Failure or refusal without good
cause to exercise reasonable diligence in the practice of public
accounting.
b. Failure to exercise
due care including negligent delegation of duties in the practice of public
accounting.
c. Neglect of contractual
or other duties to a client.
(7)
Professional misconduct.
Professional misconduct includes, but is not limited to, the following:
a. Violation of a generally accepted engagement
standard, generally accepted accounting standard, generally accepted auditing
standard, or any other nationally recognized standard applicable to the public
accounting services at issue, as provided in rule 193A-13.4 (542), or any other
violation of a provision of the AICPA Code of Professional Conduct.
b. Violation of a regulation or law of this
state, another state, the United States, or the PCAOB in the practice of public
accounting.
c. Engaging in any
conduct that subverts or attempts to subvert a board investigation of a licensed
or unlicensed firm, individual, or other entity, or failure to fully cooperate
with a disciplinary investigation of a licensee or with an investigation of
firms, individuals or other entities that are not licensed by the board,
including, without limitation, failure to comply with a subpoena issued by the
board or to respond to a board inquiry within 30 days.
d. Revocation, suspension, or other
disciplinary action taken against a licensee or person or firm exercising a
practice privilege by a licensing authority of this state or another state,
territory, or country. A stay by an appellate court does not negate the
obligation to report such incidents to the board; however, if such disciplinary
action is overturned or reversed by a court of last resort, discipline by the
board based solely on such action will be vacated.
e. Suspension or revocation of the right to
practice before any state or federal agency, or the PCAOB.
f. Violating Iowa Code section
542.17.
g. Violating Iowa Code
section 542.18.
h. Violating or
aiding and abetting another's violation of Iowa Code section 542.13 or
542.20.
i. Violating the terms of an
initial agreement with the Iowa professionals review committee or violation of
the terms of an impaired practitioner recovery contract with the Iowa
professionals review committee.
j.
Violating a practice privilege afforded to an Iowa licensee in another
state.
k. Engaging in the practice of
public accounting on a lapsed or inactive certificate, license or permit when the
acts or practices obligate active Iowa licensure and, in the case of a firm,
allowing such acts or practices by firm CPAs or LPAs.
(8)
Willful or repeated
violations. The willful or repeated violation or disregard of any
provision of Iowa Code chapter 272C or 542 or any administrative rule adopted by
the board in the administration or enforcement of such chapters.
(9)
Failure to report.
a. Failure by a CPA firm to timely report as
provided in rule 193A-7.7 (542).
b.
Failure of an LPA firm to timely report as provided in rule
193A-8.5 (542).
c. Failure to timely
report judgments and settlements and reportable violations by others as provided
in 193A-Chapter 18.
d. Failure to
report in writing to the board any issuance, denial, revocation, or suspension of
a license by another state, or the voluntary surrender of a license to resolve a
pending disciplinary investigation or action, within 30 calendar days of the
licensing authority's final action.
e. Failure to report the conviction of any
felony, or a crime described in Iowa Code section 542.5(2), within 30 calendar
days of the conviction.
f. Failure to
report to the board a change in the licensee's physical or mailing address within
30 calendar days of the change.
g.
Failure to report as provided in 193A-subrule 13.4(3) or as otherwise required in
the AICPA Code of Professional Conduct.
(10)
Failure to comply with board
order. Failure to comply with the terms of a board order or the terms of
a settlement agreement or consent order, or other decision imposing
discipline.
(11)
Conviction
of a crime. Conviction of any crime described in Iowa Code section
542.5(2) and as limited by Iowa Code section 272C.10(5) is grounds for denial,
revocation, or suspension of a license. "Conviction" includes any plea of guilty
or nolo contendere, including Alford pleas, or finding of guilt whether or not
judgment or sentence is deferred, withheld, not entered, or suspended, and
whether or not the conviction is on appeal. If such conviction is overturned or
reversed by a court of last resort, discipline by the board based solely on the
conviction is vacated.
(12)
Conduct discreditable to the accounting profession. Conduct
discreditable to the accounting profession includes any act or practice that
diminishes the public's confidence in the profession, impairs the credibility of
the profession, or otherwise compromises the public's trust. While it is not
possible to list all conduct that is discreditable to the accounting profession,
the following list provides an illustrative range of acts or practices that are
implicated:
a. Dishonesty in business or
financial affairs, or a pattern of fiscal irresponsibility.
b. Placement on the sex offender
registry.
c. Securities fraud or
violation of the Iowa consumer fraud Act.
d. Willful or repeated failure to timely file
tax returns or other tax documents.
e. False testimony in a court or administrative
proceeding, or affidavit, or otherwise under oath.
f. Providing false or misleading information to
a financial institution or governmental body or official.
g. Stating or implying an ability to improperly
influence a government agency or official, or attempting to do so through
deception, bribery or other unlawful means.
h. Violation of a breach of fiduciary duty when
acting in the capacity of a trustee, conservator, or other fiduciary, or as the
professional advisor to a fiduciary.
i. Any violation of Iowa Code chapter 542 or
administrative rules that involves dishonesty, bad faith, or unethical
behavior.