§ 542.20 — Practice privilege

Iowa § 542.20

• Jurisdiction: Iowa
• Title XIII: COMMERCE
• Ch. 542: PUBLIC ACCOUNTANTS

Text

1. This section authorizes a person or firm whose principal place of business is not in
this state to practice public accounting in Iowa in person, or by telephone, mail, or electronic
means without licensure under this chapter or notice to the board under the conditions
described in this section. Such a person or firm must hold a valid, unexpired license in good
standing in the state of its principal place of business that is substantially equivalent to a
comparable license issued in Iowa, and such a person or firm must be licensed to lawfully
perform in its principal place of business all public accounting services offered or rendered
under a practice privilege in Iowa.
2. A provision of this section or of any other section in this chapter shall not prevent the
auditor of state, the department of agriculture and land stewardship, other governmental
official or body, or a client from requiring that public accounting services performed in Iowa
or for an Iowa client be performed by a person or firm holding a license under this chapter.
3. The practice privilege authorized by this section is temporary and shall cease if the
license in the person’s or firm’s principal place of business expires, is no longer valid or
in good standing, or otherwise no longer lawfully supports the conditions of the practice
privilege described in this section.
4. The board may revoke a practice privilege, impose a civil penalty, issue an order to
secure compliance with this chapter or board rules, or take such additional actions as are
provided in section 542.14 if a person or firm acting or purporting to act under a practice
privilege violates this chapter or board rules. In addition, or as an alternative to such action,
the board may refer a complaint to the state regulatory body that issued the license to the
person or firm.
a. A violation of this chapter or board rules by a person or firm acting or purporting to
act under a practice privilege is a ground to deny the violator’s subsequent application for
licensure under this chapter.
b. A violation of this chapter or board rules by a person acting or purporting to act under a
practice privilege is a ground to deny a subsequent application for initial or renewal licensure
under this chapter by the violator’s firm, and is a ground for discipline against such firm.
c. A violation of this chapter or board rules by a person or firm acting or purporting to act
under a practice privilege is a ground for discipline against a licensee under this chapter who
aided or abetted the violation.
5. A certified public accounting firm that is licensed in the state of its principal place of
business and is not required to hold an Iowa firm license under section 542.7 may practice in
this state without a firm license under this chapter or notice to the board if the firm’s practice

in this state is performed by individuals who hold a license under this chapter or who practice
in conformance with subsection 6, under the following conditions:
a. The firm shall not have an office in Iowa which uses the title “CPAs”, “CPA firm”,
“certified public accountants”, or “certified public accounting firm”.
b. The firm shall not make any representation tending to falsely indicate that the firm is
licensed under this chapter.
c. The firm, upon a client’s or prospective client’s request, shall provide accurate
information on the state or states of licensure, principal place of business, contact
information, and manner in which licensure status can be verified.
d. The firm shall comply with all professional standards, laws, and rules that apply to
licensees performing the same professional services.
e. The firm shall comply with the ownership and peer review requirements of section
542.7.
6. An individual who is licensed in the state of the individual’s principal place of business
may exercise the privileges of a certificate holder of this state without obtaining a certificate
under this chapter or providing notice to the board, under the following conditions:
a. The individual must meet the criteria for substantial equivalency reciprocity under
section 542.19, subsection 1, paragraph “a”, “b”, or “c”.
b. The individual shall not have an office in Iowa at which the individual uses the title
“CPA”. The individual may, however, perform public accounting services using the title “CPA”
if performed at the office of a certified public accounting firm or licensed public accounting
firm that holds a permit to practice under section 542.7 or 542.8, or at the office of a business
entity that is not required to hold a firm permit under section 542.7 or 542.8.
c. An individual who provides attest services in Iowa or for a client having a home office
in Iowa must practice through a certified public accounting firm that is licensed under section
542.7, or through a certified public accounting firm that is validly licensed in the state of its
principal place of business and complies with the ownership and peer review requirements
of section 542.7.
d. An individual who provides compilation services in Iowa or for a client having a home
office in Iowa must comply with the peer review provisions of section 542.6, subsection 6, or
provide such services through a certified public accounting firm, a licensed public accounting
firm, or substantially equivalent firm that is validly licensed in the firm’s principal place of
business and is subject to the peer review and ownership provisions of section 542.7 or 542.8.
e. The individual shall not make any representation tending to falsely indicate that the
individual is licensed under this chapter.
f. The individual, upon a client’s or prospective client’s request, shall provide accurate
information on the state or states of licensure, principal place of business, contact
information, and manner in which licensure status can be verified.
g. The individual shall comply with all professional standards, laws, and rules that apply
to licensees performing the same professional services.
7. As a condition of exercising the practice privilege provided in subsection 5 or 6, the
person or firm does all of the following:
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 section 542.14 for any violation of this chapter or board rules.
b. Appoints the regulatory body of the state that issued the firm or individual license as
theagentuponwhomprocessmaybeservedinanyactionorproceedingbytheboardagainst
the firm or person.
c. Agrees to supply the board, upon the board’s request and without subpoena, such
information or records as licensees are similarly required to provide the board under
this chapter regarding themselves or, in the case of a firm, regarding the individuals
practicing through the firm, including but not limited to licensure status in all jurisdictions;
qualifications for substantial equivalency reciprocity under section 542.19, subsection 1,
paragraph “a”, “b”, or “c”; location of principal place of business and all other offices;
criminal and disciplinary background; malpractice settlements and judgments; firm
ownership and when applicable, information regarding nonlicensee owners; whether public

accounting services are subject to peer review; proof of completion of peer review, when
applicable; qualifications to supervise attest services, when applicable; and timely response
to inquiries regarding complaints and investigations conducted under this chapter.
d. Agrees to promptly cease offering or rendering public accounting services in this state
or for clients having a home office in this state if the license in the person’s or firm’s principal
place of business expires or is otherwise no longer valid or 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.
8. A licensee of this state is subject to discipline in this state based on a violation of a
comparable practice privilege afforded by another state.
9. The board shall adopt rules on the manner in which this section applies to persons
or firms that hold a lapsed Iowa license, have been subject to discipline in Iowa, have
surrendered an Iowa license, or have otherwise held an Iowa license at one point in time
that is no longer valid, active, or in good standing, and to persons or firms that have been
convicted of a crime, the subject of discipline or denied licensure in any jurisdiction, or that
would otherwise be subject to license denial or discipline if a license applicant or licensee
in Iowa.