Earlier this year, ICAEW’s Quality Assurance Department (QAD) began its first round of compliance monitoring under the institute’s updated CPD regulations, which took effect on 1 November 2023. One part of the effort focused on firms, while the other looked at the experiences of individual members.

You can find out what the team learned from firms in Regulatory and Conduct News. The focus here is what emerged from the monitoring of individual members.

First, the good news: according to the figures, only 20% of members in the sample were found to be non-compliant. Within that slice, the monitoring highlighted four key reasons:

1. 14% failed to complete the required number of CPD hours;
2. 29% lacked evidence of having completed verifiable CPD;
3. a further 29% had not undertaken any ethics training; and
4. 33% had put themselves in the wrong CPD category.

Within the fourth group, a significant number of members were unaware that offering tax services to high-net-worth individuals or serving as a trustee for a large pension fund would automatically push them into a higher category.

Retired – or not?

ICAEW’s CPD year runs from 1 November to 31 October. At the beginning of the cycle, every ICAEW member is required to reflect on their CPD needs for the coming year. ICAEW Manager, Professional Standards, Karen Cook explains that the QAD team will ask to see evidence of this reflection if a member is selected for review.

The updated regulations introduced the concept of ‘CPD category', which sets a minimum number of required hours, depending on an individual’s professional specialism and the type of organisation they work for.

Members must carry out an appropriate mix of verifiable and non-verifiable CPD, and ensure they can evidence the former. They must also do at least one hour of ethics training per CPD year.

Cook says that first, the monitoring looked at people who are regulated by ICAEW as Responsible Individuals (RIs), or those who sign off audit opinions.

Second, it turned to all members outside that population, many of whom do not work for ICAEW member firms, but instead have roles in industry – for example, as financial directors.

While people in the first group may be quite used to the QAD team visiting and speaking to their firms, those in the second group may not have as much of that interaction – which could help to explain a lower awareness of the revised CPD regulations.

“We also found members who thought that they were retired – but actually, when we dug a little deeper, we found they were still undertaking some relevant work,” says Cook.

“Perhaps they were volunteering to do the accounts at a charity – which has a very specific requirement. Anyone who has a senior role as a volunteer or trustee at a charity still needs to keep on top of their CPD and consider how they are meeting the requirements of the regulations.”

Cook notes: “If you retired during the CPD year, or are on a long-term leave of absence, you must still actively consider what you did for the part of a given year when you were still working. For instance, the revised regulations highlight the need to apply a pro rata approach – so, if your CPD category requires 20 hours, and you were there for a period of six months, you’ll need to do 10 hours.”

Seeking assurances

Importantly, though, Cook is eager to reassure any members who may be worried about being selected for a CPD review.

“When we discovered these issues in the course of our monitoring, we simply engaged with the relevant members and discussed what they need to do to comply with the regulations. A key goal is to raise awareness and work with members to help them get back on track.”

Cook continues: “We’ll seek assurances that, going forward, members will comply with the regulations, and will make up for any shortfall if they have incurred one in the current period.”

Positive message

“As professionals, we have obligations,” Cook says. “The new CPD rules are codifying those obligations through more specific requirements. Our findings show that the majority of members are already meeting them – and our role in QAD enables us to confirm this is the case.”

ICAEW Senior Manager, Professional Standards, Liz Shaw says: “It's very reassuring that an overwhelming majority of the members we looked at are in full compliance with the new regulations. 

“For those that aren’t, it’s largely a case of them tweaking what they’re doing. That means making sure that they understand the specific requirements of the regulations, and can demonstrate that they’re covering them. There is lots of information, guidance and resources on the ICAEW website to help them do this.”

“Ultimately, we want to send out a positive message. Those who aren’t compliant may simply need to make small, but important, adjustments.”