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RULE §501.90Discreditable Acts

A person shall not commit any act that reflects adversely on that person's fitness to engage in the practice of public accountancy. A discreditable act includes but is not limited to:

  (1) fraud or deceit in obtaining a certificate as a CPA or in obtaining registration under the Act or in obtaining a license to practice public accounting;

  (2) dishonesty, fraud or gross negligence in the practice of public accountancy;

  (3) violation of any of the provisions of Subchapter J or §901.458 of the Act (relating to Loss of Independence) applicable to a person certified or registered by the board;

  (4) final conviction of a felony or imposition of deferred adjudication or community supervision in connection with a criminal prosecution of a felony under the laws of any state or the United States;

  (5) final conviction of any crime or imposition of deferred adjudication or community supervision in connection with a criminal prosecution, an element of which is dishonesty or fraud under the laws of any state or the United States, a criminal prosecution for a crime of moral turpitude, a criminal prosecution involving alcohol abuse or controlled substances, or a criminal prosecution for a crime involving physical harm or the threat of physical harm;

  (6) cancellation, revocation, suspension or refusal to renew authority to practice as a CPA or a public accountant by any other state for any cause other than failure to pay the appropriate registration fee in such other state;

  (7) suspension or revocation of or any consent decree concerning the right to practice before any state or federal regulatory or licensing body for a cause which in the opinion of the board warrants its action;

  (8) a final finding of conduct by state or federal courts of competent jurisdiction, agencies, boards, local governments or commissions for violations of state or federal laws or rules or findings of unethical conduct by licensees that engage in activities regulated by entities including but not limited to: the Public Company Accounting Oversight Board, Internal Revenue Service, U.S. Securities and Exchange Commission, U.S. Department of Labor, U.S. General Accounting Office, U.S. Housing and Urban Development, Texas State Auditor, Texas State Treasurer, Texas Securities Board, Texas Department of Insurance, and the Texas Secretary of State;

  (9) knowingly participating in the preparation of a false or misleading financial statement or tax return;

  (10) fiscal dishonesty or breach of fiduciary responsibility of any type;

  (11) failure to comply with a final order of any state or federal court;

  (12) repeated failure to respond to a client's inquiry within a reasonable time without good cause;

  (13) intentionally misrepresenting facts or making a misleading or deceitful statement to a client, the board, board staff or any person acting on behalf of the board;

  (14) giving intentional false sworn testimony or perjury in court or in connection with discovery in a court proceeding or in any communication to the board or any other federal or state regulatory or licensing body;

  (15) threats of bodily harm or retribution to a client;

  (16) public allegations of a lack of mental capacity of a client which cannot be supported in fact;

  (17) voluntarily disclosing information communicated to the person by an employer, past or present, or through the person's employment in connection with accounting services rendered to the employer, except:

    (A) by permission of the employer;

    (B) pursuant to the Government Code, Chapter 554 (commonly referred to as the "Whistle Blowers Act");

    (C) pursuant to:

      (i) a court order signed by a judge;

      (ii) a summons under the provisions of:

        (I) the Internal Revenue Code of 1986 and its subsequent amendments;

        (II) the Securities Act of 1933 (15 U.S.C. §77a et seq.) and its subsequent amendments; or

        (III) the Securities Exchange Act of 1934 (15 U.S.C. §78a et seq.) and its subsequent amendments;

      (iii) a congressional or grand jury subpoena; or

      (iv) applicable federal laws, federal government regulations, including requirements of the PCAOB;

    (D) in an investigation or proceeding by the board;

    (E) in an ethical investigation conducted by a professional organization of CPAs;

    (F) in the course of a peer review under §901.159 of the Act (relating to Peer Review); or

    (G) any information that is required to be disclosed by the professional standards for reporting on the examination of a financial statement.

  (18) breaching the terms of an agreed consent order entered by the board or violating any Board Order.

  (19) Interpretive Comment: The board has found in §519.7 of this title (relating to Misdemeanors that Subject a Licensee or Certificate Holder to Discipline by the Board) and §525.1 of this title (relating to Applications for the Uniform CPA Examination, Issuance of the CPA Certificate, or a License) that any crime of moral turpitude directly relates to the practice of public accountancy. A crime of moral turpitude is defined in this chapter as a crime involving grave infringement of the moral sentiment of the community. The board has found in §519.7 of this title that any crime involving alcohol abuse or controlled substances directly relates to the practice of public accountancy.

  (20) Interpretive comment: A conviction or final finding of unethical conduct by a competent authority, for the purpose of paragraph (8) of this subsection, includes any right to practice before the authority or findings that limit the scope of the permit or license conveyed by the authority. Conviction relates to the finding in a criminal proceeding and final finding relates to a determination in a non-criminal proceeding. Unethical conduct or activities are determined by the governmental entity making the determination of a conviction or final finding.

Source Note: The provisions of this §501.90 adopted to be effective June 11, 2000, 25 TexReg 5340; amended to be effective October 16, 2002, 27 TexReg 9573; amended to be effective February 4, 2004, 29 TexReg 964; amended to be effective June 7, 2006, 31 TexReg 4642; amended to be effective February 17, 2008, 33 TexReg 1097; amended to be effective August 17, 2008, 33 TexReg 6372; amended to be effective January 28, 2009, 34 TexReg 429; amended to be effective June 17, 2009, 34 TexReg 3948; amended to be effective December 7, 2011, 36 TexReg 8237; amended to be effective June 13, 2013, 38 TexReg 3608; amended to be effective October8,2014, 39 TexReg 7919; amended to be effective June 6, 2018, 43 TexReg 3592

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