The Texas Rules of Professional Conduct for CPAs live in Title 22, Chapter 501 of the Texas Administrative Code, and the Texas State Board of Public Accountancy (TSBPA) enforces them against every person who holds a Texas CPA certificate. The rules cover integrity, independence, competence, confidentiality, fees, and a long list of discreditable acts. Breaking them can cost you a public reprimand, an administrative penalty, suspension, or your certificate itself.
Integrity, Objectivity, and Independence
Section 501.73 requires every Texas CPA to act with integrity and objectivity in all professional work. Integrity means being honest and straightforward with clients and the public, even when confidentiality limits what you can say. Objectivity means keeping your judgment free from bias, personal relationships, and outside pressure, so reports and opinions reflect the actual financial picture. If a client pushes you to shade a number, objectivity is the rule that says you step back, and it applies across all service types, not just audits.1Legal Information Institute. Texas Administrative Code 22 TAC 501.73 – Integrity and Objectivity
Independence under Section 501.70 is a separate, stricter obligation, and it applies primarily to attest services such as audits, reviews, and compilations. A CPA performing these engagements must be independent both in fact and in appearance, conforming to standards set by the AICPA, the SEC, the PCAOB, and the U.S. GAO, among others.2Legal Information Institute. Texas Administrative Code 22 TAC 501.70 – Independence
In practice, a CPA who holds a financial interest in a client’s business cannot audit that client. The same goes for close family relationships with client management or a loan arrangement with the client. Independence in appearance matters as much as independence in fact, because an outside investor reading an audit report has no way to know what went on behind the scenes. If the arrangement looks compromised, the rule treats it as compromised.
Professional Competence
Under Section 501.74, a CPA may only take on work that falls within their professional competence or that they can reasonably expect to complete with the necessary skill.3Legal Information Institute. Texas Administrative Code 22 TAC 501.74 – Competence Accepting a specialized engagement in an unfamiliar industry because you don’t want to lose the client is the kind of decision this rule targets. If you lack the expertise for a particular job, acquire it before starting or decline the engagement.
Due professional care is part of the same expectation. Supervise your staff, review the work product thoroughly, and don’t let time pressure erode quality. The board treats carelessness the same as incompetence when evaluating a complaint. Compliance with technical standards is embedded here too: CPAs preparing or reviewing financial statements must follow Generally Accepted Accounting Principles (GAAP) and Generally Accepted Auditing Standards (GAAS), and departing from them without disclosure opens you to disciplinary action.
Client Confidentiality and Records
Section 501.75 prohibits a CPA from disclosing confidential client information without the client’s express consent. The protection covers all data you obtain during the professional relationship, whether it comes from the client directly, from their records, or from work you perform on their behalf.4Legal Information Institute. Texas Administrative Code 22 TAC 501.75 – Confidential Client Communications
The exceptions are narrow. A valid court-ordered subpoena compels disclosure. So does a TSBPA investigation where the board formally requests information. Complying with professional standards that require disclosure of certain findings, such as reporting requirements in a government audit, is another recognized exception. Outside those situations, the default is silence.
Section 501.76 requires CPAs to return original client records promptly after a request, and “promptly” means within 10 business days. Original client records include documents the client gave you as well as documents you obtained on the client’s behalf during the engagement.5Legal Information Institute. Texas Administrative Code 22 TAC 501.76 – Records and Work Papers
You cannot withhold original records to pressure a client into paying an outstanding balance. The rule explicitly states that records must be returned regardless of the client’s account status, and you cannot charge a fee for providing them. You may keep copies of your own internal work papers, but the client’s receipts, ledgers, and source documents belong to the client. Using those documents as leverage in a billing dispute is itself a violation.
Commissions and Contingent Fees
Texas treats these as two separate rules. Section 501.71 restricts commissions a CPA might receive for recommending third-party products or services to a client, especially when the CPA also performs attest work for that client. If you earn a commission for steering a client toward a particular financial product, your recommendation stops being independent advice.
Section 501.72 bars contingent fees, which are payments that depend on a specific outcome, for preparing an original tax return or for any engagement that requires independence, such as an audit or review.6Legal Information Institute. Texas Administrative Code 22 TAC 501.72 – Contingency Fees Tying your payment to a financial result gives you an incentive to prioritize that result over accuracy, which is exactly what the rule is trying to prevent.
Discreditable Acts
Section 501.90 lists conduct that reflects poorly on a CPA’s fitness to practice, and the board can discipline a licensee for any item on it.7Legal Information Institute. Texas Administrative Code 22 TAC 501.90 – Discreditable Acts The main categories are:
- Fraud or deceit in obtaining your license, including misrepresenting qualifications or experience during certification.
- Dishonesty, fraud, or gross negligence in practice. This is the broadest catch-all and covers everything from inflating numbers to sloppy work that causes real harm.
- A final felony conviction or deferred adjudication for any felony, whether or not it relates to accounting.
- Crimes involving dishonesty or moral turpitude, including misdemeanor convictions where fraud or dishonesty is an element.
- Knowingly preparing a false tax return or financial statement for a client or otherwise.
- Fiscal dishonesty or breach of fiduciary responsibility, including mishandling money or assets entrusted to your care.
- Discipline by another jurisdiction. If another state suspends or revokes your CPA authority, Texas treats that as a discreditable act here.
- Repeatedly ignoring client inquiries, meaning failing to respond within a reasonable time without good cause.
One thing the rule does not include, despite what you may hear, is a standalone violation for failing to file your own personal tax returns. Section 501.90 addresses preparing false returns, not failure to file. If a failure to file leads to a criminal tax conviction, though, the felony or dishonesty provisions apply indirectly.
How the Board Enforces the Rules
When the TSBPA receives a complaint, it routes the case to one of three committees. Technical Standards Review Committees I and II handle allegations involving attest services and professional standards. The Behavioral Enforcement Committee handles everything else. Each committee can dismiss the case for insufficient evidence, request additional information, invite the CPA to an informal meeting, or work toward an Agreed Consent Order.8Texas State Board of Public Accountancy. TSBPA Board Report
Most resolved cases end with consent orders, which can include public reprimands, required corrective actions, administrative penalties, or certificate revocation. If the CPA and the board cannot reach agreement, the case goes to a judge at the State Office of Administrative Hearings, who issues a recommendation the board can adopt or modify.
Some enforcement happens automatically. Failing to pay license fees for three consecutive renewal periods results in automatic certificate revocation. Falling behind on continuing education triggers a suspension that lasts until the CPA comes into compliance, with a $100 penalty for each year of non-compliance.
Continuing Professional Education
Texas CPAs must complete 120 hours of continuing professional education over each rolling three-year period, with a minimum of 20 hours per year. Within that total, every licensee must take a four-credit ethics course approved by the TSBPA on a two-year cycle.9Texas State Board of Public Accountancy. L0015 – Board-Approved Ethics Courses
Only board-approved ethics courses count. A general ethics course that hasn’t been vetted by the TSBPA won’t satisfy the requirement, and you’ll be flagged as non-compliant during your next renewal. Falling behind on CPE is one of the most common reasons Texas CPAs face administrative action, and the consequences escalate quickly from penalties to suspension.
Peer Review for Firms
CPA firms in Texas that perform audits, reviews, compilations, or certain special reports must enroll in the board’s peer review program under Chapter 527. Peer review is a periodic outside evaluation of a firm’s accounting and auditing practice, designed to verify compliance with professional standards.10Texas State Board of Public Accountancy. TSBPA – Peer Review Program Overview
The requirement applies specifically to firms issuing opinions or reports that reference GAAP compliance or that follow the Statements on Auditing Standards or Statements on Standards for Accounting and Review Services. If your firm only provides tax preparation, bookkeeping, or consulting services without issuing attest reports, peer review does not apply. For firms that do qualify, reviews are conducted under AICPA standards, and failing to enroll or complete the review on time can result in board action against the firm’s license.
Federal Rules That Stack on Top
Texas CPAs who prepare tax returns or represent clients before the IRS are also subject to Treasury Department Circular 230, which operates independently of the TSBPA rules. Circular 230 requires reasonable care in preparing returns, verification of the accuracy of representations you make to the IRS and to clients, and supervision of anyone working under you.11Internal Revenue Service. Regulations Governing Practice Before the Internal Revenue Service (Circular 230)
You can generally rely in good faith on information your client provides without independently verifying every number. That reliance has limits. If something the client tells you looks incorrect, contradicts other information you already have, or seems incomplete, you must make reasonable inquiries before proceeding. Ignoring red flags is not good-faith reliance.
IRS sanctions for Circular 230 violations range from censure to suspension or permanent disbarment from practicing before the IRS. The IRS can also impose a monetary penalty up to the gross income you earned from the conduct that triggered the violation. These federal sanctions apply on top of anything the TSBPA might do, so a single act of misconduct in tax practice can draw parallel proceedings at both the state and federal level.
Separately, federal law under IRC Section 7216 makes it a criminal misdemeanor for a tax preparer to knowingly or recklessly disclose client tax return information for any purpose other than preparing the return. The maximum criminal penalty is one year of imprisonment, a $1,000 fine, or both. A civil penalty of $250 per unauthorized disclosure also applies, capped at $10,000 per calendar year.12eCFR. 26 CFR 301.7216-1 – Penalty for Disclosure or Use of Tax Return Information That federal layer sits on top of the state confidentiality obligations under Section 501.75, making unauthorized disclosure of tax data one of the more heavily regulated areas for Texas CPAs who do tax work.