542.8 Qualifications for and issuance of a license as a licensed public accountant —
renewal of license — firm registration — peer review.
1. The license of a licensed public accountant shall be granted by the board to any person
who meets one of the following requirements:
a. The applicant holds a license as an accounting practitioner issued under the laws of this state in full force and effect on July 1, 2002, and has completed additional educational requirements as prescribed by the board.
b. The applicant has satisfactorily completed the examination prescribed in subsection 2 after having met one of the following:
(1) The applicant has had two or more years’ actual experience in practice as an accountant as an employee of a certified public accountant, an accounting practitioner, or a licensed public accountant.
(2) The applicant submits evidence satisfactory to the board that the applicant is a graduate of a four-year college or university accredited by the north central accreditation association or other regional accreditation association having equivalent standards, with a major in accounting, or that the applicant is a graduate in accountancy from a business or correspondence school accredited by the accrediting commission for business schools or the accrediting commission of the national home study council.
(3) The applicant submits evidence of at least five years of continuous experience engaged in performing any of the services delineated in § 542.3, subsection 12, on a full-time basis.
2. An examination shall be conducted by the board as often as deemed necessary, but not less than two times per year.
3. The examination shall be designed and given in a manner as to fairly test the applicant’s knowledge of accounting. The examination shall not include questions relating to the subject of auditing.
4. The board, in its discretion, may use all or any part of a standard or uniform examination and advisory grading service that is provided or furnished by a national accounting organization or society to assist the board in the performance of its duties under this chapter. The identity of the person taking the examination shall be concealed until after the examination papers have been graded.
5. If an applicant has partially passed an examination given in another state determined by the board to be substantially equivalent to the examination required by this state and meets eligibility requirements that the board finds to be substantially equivalent to those prescribed by this state, the results of the other state’s examination shall be accepted as though given in this state.
6. An applicant who successfully passes all subjects in which examined shall be issued a license as a licensed public accountant by the board. The cost of the license shall be based upon the administrative costs of the board and the costs of issuing the license.
7. An applicant who fails the examination once shall be allowed to take the examination at the next scheduled time. Thereafter, the applicant shall be allowed to take the examination at the discretion of the board. An applicant who passes a portion of the examination shall have the right to be reexamined in the remaining subjects at a future examination, and if the applicant passes the remaining subjects, the applicant shall be considered to have passed the entire examination. An applicant who fails the examination may request in writing information from the board concerning the applicant’s examination grade and subject areas or questions which the applicant failed to answer correctly, except that if the board administers a uniform, standardized examination, the board shall only be required to provide the examination grade and such other information concerning the applicant’s examination results which is available to the board.
8. An applicant for initial issuance of a license must have no less than one year of experience. The experience shall include providing any type of service or advice involving the use of accounting, compilation, management advisory, financial advisory, tax, or consulting skills, as verified by a licensee, meeting requirements prescribed by the board by

§542.8, PUBLIC ACCOUNTANTS 2

rule. The experience is acceptable if gained through employment in government, industry, academia, or public practice.
9. a. The licensed public accountant license shall expire in intervals as determined by the board. The board shall notify a person licensed under this chapter of the date of expiration of the license and the amount of the fee required for its renewal. The notice shall be mailed at least one month in advance of the expiration date. A person who fails to renew a license as a licensed public accountant by the expiration date shall be allowed to do so within thirty days following its expiration, but the board may assess a reasonable penalty.
b. A licensee, for renewal of a license under this section, shall participate in a program of learning designed to maintain professional competency. Such program of learning must comply with rules adopted by the board. The board, by rule, may grant an exception to this requirement for a licensee who does not perform or offer to perform for the public one or more kinds of services involving the use of accounting or auditing skills, including issuance of reports on financial statements or the use of one or more kinds of management advisory, financial advisory, or consulting services, or the preparation of tax returns or the furnishing of advice on tax matters. A licensee entitled to an exception by rule of the board shall place the word “”inactive”” adjacent to the licensee’s licensed public accountant title on any business card, letterhead, or other document or device, with the exception of the licensee’s licensed public accountant license, on which the licensee’s licensed public accountant title appears.
10. The board, in its discretion, may waive an examination and issue a license as a licensed public accountant to an applicant for one of the following:
a. The applicant holds a license as a licensed public accountant, an accounting practitioner, or similar title issued, after examination, by a state which extends by substantial equivalency privileges to a licensed public accountant of this state, and who, at the time of issuance of the registration, possessed the basic qualifications set forth in subsection 1.
b. The applicant has passed the examination required under the laws of another state and possesses the basic qualifications set forth in subsection 1 at the time the applicant applied for registration in this state.
11. A person applying for a license as a licensed public accountant shall pay a fee as determined by the board based upon the costs of issuing such licenses.
12. The board shall issue or renew a permit to practice as a licensed public accounting firm to a person that makes application and demonstrates the qualification set forth in this section or to a licensed public accounting firm originally registered in another state that provides evidence that the qualifications met in the other state are substantially equivalent to those required by this section. A firm must hold a permit issued under this section in order to use the title “”LPAs”” or “”Licensed Public Accountants”” in a firm name.
a. An applicant for initial issuance or renewal of a permit to practice as a firm under this section must show that notwithstanding any other provision of law, a simple majority of the ownership of the firm, in terms of financial interests and voting rights of all partners, officers, shareholders, members, and managers, belongs to the holders of a certificate or license issued by a state, and that such partners, officers, shareholders, members, and managers who perform professional services in this state or for clients in this state hold a certificate issued under § 542.6 or a license issued under this section, or another state if the holder has a practice privilege under § 542.20. To qualify for firm licensure at least one partner, officer, shareholder, member, or manager shall hold a license under this section. b. A licensed public accounting firm may include a nonlicensee owner, which for purposes
of this section means an owner that does not hold a valid license or certificate to practice public accounting in any state, provided all of the following occur:
(1) Such firm designates a licensee who is responsible for the proper registration of the firm, and identifies that individual to the board.
(2) All nonlicensee owners are of good moral character and active participants in the firm or an affiliated entity.
(3) All nonlicensee owners comply with all applicable rules of professional conduct adopted by the board.
(4) Such firm complies with other requirements as established by the board by rule.
c. An individual licensee or person with a practice privilege under § 542.20 who is
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responsible for compilation services and signs or authorizes someone to sign the accountant’s report on behalf of the firm shall meet the competency requirements set out in nationally recognized professional standards for such services.
d. An individual licensee or person with a practice privilege under § 542.20 who signs or authorizes someone to sign the accountant’s report on behalf of the firm shall meet the competency requirements set out in nationally recognized professional standards for such services.
e. The board may deny the issuance or renewal of, or revoke a permit, or otherwise discipline the holder of a permit issued under this section if a nonlicensee owner’s professional license has been revoked in any jurisdiction or a nonlicensee owner has been convicted of a crime described in § 542.5, subsection 2, if the board determines that such revocation or conviction is detrimental to the public interest and would be a ground for discipline if applicable to a licensee under this chapter.
13. An applicant for initial issuance or renewal of a permit to practice as a licensed public accounting firm is required to register each office of the firm within this state with the board and to show that all compilation services rendered in this state are under the charge of a person holding a valid certificate issued under § 542.6 or 542.19, or a license issued under this section, or another state if the holder has a practice privilege under § 542.20.
14. The board, by rule, shall establish and charge an application fee for each application for initial issuance or renewal of a permit.
15. An applicant for initial issuance or renewal of a permit shall list in the application all states in which the applicant has applied for or holds a permit as a certified public accountant or a licensed public accounting firm and list any past denial, revocation, or suspension of a permit by another state. A holder of or applicant for a permit shall notify the board in writing within thirty days after an occurrence of any of the following:
a. A change in the identity of a partner, officer, shareholder, member, or manager who performs professional services in this state or for clients in this state.
b. A change in the number or location of offices within this state.
c. A change in the identity of a person in charge of such offices.
d. The issuance, denial, revocation, or suspension of a permit by another state.
16. A firm, after receiving or renewing a permit which is not in compliance with this section as a result of a change in firm ownership or personnel, shall take corrective action to bring the firm back into compliance as quickly as possible or apply to modify or amend the permit. The board may grant a reasonable period of time for a firm to take such corrective action. Failure to comply within a reasonable period as deemed by the board shall result in the suspension or revocation of the firm permit.
17. The board, by rule, shall require as a condition of renewal of a permit to practice as a licensed public accounting firm, that an applicant undergo, no more frequently than once every three years, a peer review conducted in such manner as the board specifies. The review shall include verification that any individual in the firm who is responsible for supervising compilation services and who signs or authorizes someone to sign the accountant’s report on a financial statement on behalf of the firm meets the competency requirements set forth in the professional standards for such services. Such rules shall include reasonable provision for compliance by an applicant showing that the applicant, within the preceding three years, has undergone a peer review that is a satisfactory equivalent to the peer review required under this subsection. An applicant’s completion of a peer review program endorsed or supported by the national society of accountants, or other substantially similar review as determined by the board, satisfies the requirements of this subsection.
18. An applicant for a permit to practice as a licensed public accounting firm, at the time of renewal, may request in writing upon forms provided by the board, a waiver from the requirements of subsection 17. The board may grant a waiver upon a showing satisfactory to the board of any of the following:
a. The applicant does not engage in, and does not intend to engage in during the following year, financial reporting areas of practice, including but not limited to compilations. An applicant granted a waiver pursuant to this paragraph shall immediately notify the board if the applicant engages in such practice, and shall be subject to peer review.
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b. Reasons of health.
c. Military service.
d. Instances of hardship.
e. Other good cause as determined by the board.
19. Peer review records are privileged and confidential, and are not subject to discovery, subpoena, or other means of legal compulsion. Peer review records are not admissible in evidence in a judicial, administrative, or arbitration proceeding. Unless the subject of a peer review timely objects in writing to the administering entity of the peer review program, the administering entity shall make available to the board within thirty days of the issuance of the peer review acceptance letter the final peer review report or such peer review records as are designated by the peer review program in which the administering entity participates. The subject of a peer review may voluntarily submit the final peer review report directly to the board. Information or documents discoverable from sources other than a peer review team do not become nondiscoverable from such other sources because they are made available to or are in the possession of a peer review team. Information or documents publicly available from the national society of accountants relating to quality or peer review are not privileged or confidential under this subsection. A person or organization participating in the peer review process shall not testify as to the findings, recommendations, evaluations, or opinions of a peer review team in a judicial, administrative, or arbitration proceeding.
20. A person is not liable as a result of an act, omission, or decision made in connection with the person’s service in a peer review team, unless the act, omission, or decision is made with actual malice. A person is not liable as a result of providing information to a peer review team, or for disclosure of privileged matters to a peer review team.
21. The costs of the peer review shall be paid by the applicant.
22. The board, by rule, shall require as a condition for renewal of a license under this section by any license holder who performs compilation services for the public other than through a licensed public accounting firm or a certified public accounting firm, that such individual undergo, no more frequently than once every three years, a peer review conducted in such manner as the board shall by rule specify, and such review shall include verification that such individual has met the competency requirements set out in professional standards for such services.
2001 Acts, ch 55, §8, 38; 2003 Acts, ch 108, §101; 2008 Acts, ch 1106, §9, 10, 15; 2010 Acts, ch 1055, §1; 2017 Acts, ch 78, §4, 5
Referred to in §542.3, 542.4, 542.9, 542.13, 542.20