The revised CPD Regulations (effective November 2023) place specific responsibilities on ICAEW member firms/other firms. Read about the requirements and the actions firms should take forward in ensuring their affected members of staff are compliant.
ICAEW member firms, and other firms regulated by ICAEW, are expected to display the professional capability, skills and knowledge that uphold the value of the accountancy profession and the qualification.
Under the revised CPD Regulations (from 1 November 2023), all ICAEW member firms and other firms will be required to:
a) Ensure that all of their members and relevant persons are in compliance with at least the minimum relevant and verifiable hours requirement for their CPD category for the professional work which their members and relevant persons carry out for their firm.
b) Maintain records of at least the relevant and verifiable CPD hours undertaken by all of their members and relevant persons.
c) Make available to the ICAEW Quality Assurance Department (QAD) on request their records for CPD carried out by their members and relevant persons.
The new requirements strengthen ICAEW’s ability to monitor and ensure that ICAEW Chartered Accountants and relevant persons are undertaking sufficient CPD. And they provide much stronger assurance to oversight regulators, politicians and the public that ICAEW Chartered Accountants are maintaining and enhancing their competence within ever-increasingly complex professional and regulatory environments.
Your firm may already have existing systems in place to monitor CPD, training and competence. While the revised CPD Regulations place a new responsibility on firms in terms of specific CPD requirements, it is something your firm should be doing in a broader sense.
Firms working in regulated areas will already be familiar with this requirement – for instance, under the Audit Regulations, firms are required to make sure all their principals and employees are competent to do audit work.
The revision of the CPD Regulations gives your firm the chance to review current processes, reassess the CPD needs of staff, and enhance your firm’s practice risk management.
On 27 September, ICAEW hosted a live webinar outlining what the changes to CPD Regulations mean for firms and answering key questions.
CPD monitoring requirements
In most instances, the ICAEW Professional Standards Department/QAD will communicate requirements for CPD monitoring by email with the ICAEW practice assurance principal or ICAEW's regulatory contact for your firm.
One size doesn’t fit all – ICAEW’s broad membership means its approach to CPD must meet a wide range of needs, from sole practitioners to the Big Four firms, as well as those working across different service lines and members working in business, the public sector or in not-for-profit organisations.
The revised CPD Regulations establish new CPD categories for ICAEW Chartered Accountants and relevant persons.
A driving factor for defining the CPD categories is the degree of risk to the public in the service or work that's being undertaken. ICAEW members and relevant persons will be required to identify which CPD category is most applicable and to complete the specified minimum number of verifiable and non-verifiable hours (see step 2).
Action required by your firm:
- Review the revised CPD Regulations.
- Ensure all ICAEW Chartered Accountants and relevant persons working in your firm have confirmed which CPD category is most applicable to them, based on the type of work they do.
Resources to help with this:
Identify CPD categories
Find out what CPD categories are most applicable to your staff members and how many hours of CPD they will need to complete by using our CPD self-assessment tool.
A new element of the revised CPD policy is the requirement for ICAEW Chartered Accountants and relevant persons to undertake and record a minimum number of verifiable hours of CPD.
It’s important to ensure staff are giving themselves credit for all the things they are doing. Verifiable CPD is any activity that enables members to keep up to date and proficient in their role, and which can be evidenced – ie, is fact based and can be corroborated.
This will capture much wider learning opportunities than just the traditional attendance on courses. It can include courses and seminars, whether face-to-face or online. It’s less likely that firms are mandating activity, such as technical research for an article or presentation, yet these count as verifiable. And if people aren't aware of that, they won't be putting these activities on their CPD record.
Your firm, ICAEW Chartered Accountants and relevant persons need to ensure they understand what counts as verifiable hours and that your firm’s process for recording CPD includes the requirement to capture verifiable hours within the total CPD hours.
Action required by your firm:
- Check your firm, ICAEW Chartered Accountants and relevant persons understand what is meant by verifiable hours and the minimum number of verifiable hours required for their CPD category.
- Check that your firm’s process for recording CPD will capture verifiable hours.
Resources to help with this:
- ICAEW's CPD self-assessment tool helps individuals determine which CPD category is most applicable.
The type and content of CPD that ICAEW Chartered Accountants and relevant persons choose to undertake remains left to their discretion as long as it is relevant to their role, with one exception: they must complete a minimum of one hour mandatory annual training aligned to ICAEW’s Code of Ethics.
ICAEW has produced a free online ethics CPD course for all members and relevant persons. This does not have to be used, however, and individuals can attend equivalent training through your firm or via an external provider, as long as it meets ICAEW’s learning objectives.
Action required by your firm:
- Review ICAEW's ethics CPD course and decide if your firm will use this training or another ethics training resource.
- If a non-ICAEW ethics training resource is to be used, please check it's equivalent to the learning outcomes of ICAEW's ethics course.
Whatever systems your firm already has for monitoring training and competence, take this opportunity to look at existing procedures and decide whether these comply or need amending to deliver the new CPD requirements.
You don't need a complex system and there isn’t a prescribed format for keeping CPD records for everyone. It’s a case of having the right oversight and being aware of, and driving, the training.
Start with familiarising yourself with the new regulations and guidance, then apply these to your own environment and consider how you would show that your firm is complying with the ICAEW CPD Regulations. How would you demonstrate what you've done in the firm.
The questions we recommend you consider are:
- How do we oversee what CPD is being carried out by ICAEW Chartered Accountants/relevant persons in our firm?
- How do we make sure that people are in the right CPD categories and are complying with the requirements of the CPD Regulations?
- Does our process provide a way to record verifiable and non-verifiable hours?
- How do we check things so that at the end of the year we can show that the relevant people have complied with the CPD Regulations?
Action required by your firm:
The CPD Regulations are effective for CPD years from 1 November 2023 which means the first full year of CPD records will need to be available from 31 October 2024 (or the end of a firm’s first full CPD year after this).
ICAEW will start monitoring compliance with the new regulations from November 2024, however, we will continue to engage with and support firms before then.
The ICAEW QAD team will use a mix of monitoring methods designed to assess how firms and individuals meet their responsibilities under the CPD Regulations.
On an anonymous basis the monitoring process will include regular dissemination of good practice identified and any issues arising to help support both firms and individuals in complying with the CPD Regulations.
1. Which firms have responsibilities under the revised regulations?
Under the revised CPD Regulations (effective 1 November 2023), the following have a responsibility to comply with the requirements for firms:
- ICAEW member firms;
- firms that have been granted a dispensation to use the description “Chartered Accountants”; and
- firms regulated by ICAEW for audit, local audit, investment business, probate work or as a licensed practice.
This is not restricted to UK firms and includes firms located elsewhere falling within these definitions.
2. Who are firms responsible for under the revised regulations?
- ICAEW members carrying out accountancy or finance work, or reserved or non-reserved legal services; and
- non-ICAEW members who are regulated by ICAEW as a responsible individual (RI) for audit, a key audit partner (KAP) for local public audit, an insolvency practitioner, a probate authorised individual, or a licensed practitioner under the Licensed Practice scheme.
You have a responsibility to ensure these employees:
- correctly assess which CPD category they sit in;
- comply with the minimum number of relevant and verifiable hours for their CPD category; and
- have a record of their CPD available for potential review by ICAEW.
You only have responsibility for the work your employees carry out for you. Anything they do outside of work is their responsibility, including if this puts them in a different CPD category. They will need to maintain their own records to support this.
Employees that have not worked at all during a CPD year (1 November to 31 October)
If an employee is taking a career break, on maternity/paternity leave or long-term sick leave, they are exempt from the requirements of the regulations for that CPD year.
Employees that only work part of the CPD year
Employees only working part of a CPD year are required to carry out a pro-rata amount of the minimum hours required for their role. You have a responsibility to ensure your staff are competent for the work they carry out. You may decide that additional training in excess of the minimum number of hours is needed, for example if there have been significant changes in regulations or standards during their absence.
3. What records does my firm need to keep, and is there a required format?
The records should contain details of the CPD activity, including number of hours. Where the CPD activity is considered to be verifiable, the records also need to contain sufficient evidence to support this. ICAEW’s guidance on verifiable CPD includes examples of the type of evidence we expect to see. You will need to retain this evidence as part of the overall CPD record.
There is no prescribed format, you can decide how to record CPD. If your firm uses a learning management system you will already be recording CPD activity within the system. You may need to enhance this to include evidence of verifiable CPD.
If your firm doesn’t use a learning management system, you can use whatever method you prefer. For smaller firms a simple and cost-effective method could be to use Excel-based records. Individual staff can record their CPD in different ways, however, making the record consistent across the firm would make central monitoring easier and more efficient.
Whatever recording system you use, you should ensure records are retained for at least three years after a CPD year ends.
4. Do the firm’s responsibilities extend to reciprocal members?
Reciprocal members are individuals who gained ICAEW membership or membership of another professional body, under a reciprocal membership agreement made between the other body and with ICAEW (see full list of reciprocal membership bodies). Under those agreements there is an option for the individual to choose to comply with the other body’s CPD regime, rather than ICAEW’s, unless they are a responsible individual (RI) or key audit partner (KAP).
Other than those who are reciprocal RIs/KAPs, the firm's responsibility may be limited to ensuring the reciprocal member is exempt from complying with the CPD Regulations (through satisfying the CPD requirements and obligations relating to their other professional body).
5. What is the difference between firm and member responsibility?
The CPD Regulations place requirements on both ICAEW members/regulated individuals and ICAEW member firms.
Individual members have responsibility to correctly assess which CPD category they sit in. This must consider all work they carry out (both inside and outside their employment). Based on this they will need to reflect on their development needs and carry out the required minimum number of hours, including the mandatory ethics requirement. They will need to be able to provide records to support their CPD.
Firms have a responsibility to ensure that all employees detailed in question two are compliant with these regulations. This means that you will need a central process to review and monitor your employee CPD records. You will need to consider whether they have correctly assessed which CPD category they sit in and check they have carried out the minimum required hours, including verifiable hours and mandatory ethics training. You should also retain all records, including evidence of verifiable CPD, centrally.
6. We provide our own in-house training. Will this classify as verifiable CPD?
Yes, internal training can count towards verifiable CPD as long as firms can provide evidence to support this activity. This evidence can be demonstrated in several ways, such as attendance records or a formal certificate of attendance from the internal system or training coordinator.
We also expect the CPD activity to be supported with details about how this is relevant to individuals’ roles and how it meets their specific learning outcomes. This may include providing details of the training content.
7. We provide our own ethics training. Can we continue to do this?
Yes, but we ask that you compare the learning outcomes of your training to the ICAEW ethics CPD course to make sure that your firm’s training satisfies specified learning outcomes aligned to the ICAEW Code of Ethics. It also needs to be a minimum of one hour each year.
8. Can ICAEW provide me with a list of my employees who have completed the ICAEW ethics CPD course?
No, we are unable to do this. As the firm has a responsibility to ensure its staff are complying with the CPD Regulations, we suggest you ask members of your staff who complete the ICAEW ethics CPD course to separately record this within their CPD records. They will also need to retain evidence to demonstrate they have done this. We suggest you check all staff have completed this as part of your CPD record checks.
9. We have a different CPD year to ICAEW. Do we need to change this?
No, the ICAEW CPD year is from 1 November to 31 October, but we understand that firms may have different CPD years, for example, aligned to their financial year end. We don’t expect you to change this and we will consider the firm’s CPD year in our monitoring.
10. How do the regulations apply to part-time workers?
There is no difference between the way the regulations are applied to full-time or part-time workers. The minimum hours requirements apply regardless of whether a member or regulated person works part-time or full-time.
The decision was made to not prorate CPD hours as those working part-time need to be as technically up to date and as competent as their full-time colleagues.
11. What future communications will there be?
ICAEW will continue to talk about the changes to CPD across various channels, including our Daily, Weekly and Monthly emails, and cross promotion in other newsletters. There will be further emails specifically on the changes to members and firms in the run up to November.
The webinar on 27 September 2023, focused on what the changes will mean for firms. It covered topics, such as, understanding CPD categories, what is meant by verifiable hours and the ethics training requirement. Access the webinar resources.
12. How do the regulations apply to reciprocal members?
Reciprocal members are those who have either become a member of ICAEW, or joined another professional body, via a reciprocal membership agreement which ICAEW has with certain bodies in other countries.
Under the terms of those reciprocal membership agreements, a member can choose which body’s CPD requirements to follow, unless they are a responsible individual or a key audit partner. In those circumstances they must comply with ICAEW’s CPD Regulations.
See the full list of professional bodies that have reciprocal membership agreements with ICAEW.
13. Will there be firm access to ICAEW CPD record tool?
Firms will not have access to an individual’s online CPD record with ICAEW, however, members will be able to download a CSV file from that record that they can provide to the firm to support with monitoring.
14. What is the definition of verifiable CPD?
For a CPD activity to be classed as verifiable, independent evidence must be provided that proves it was carried out.
See further guidance and examples of what could constitute as evidence for CPD activities.
15. What should firms do if new joiners start mid-way through the year?
While we wouldn’t hold the firm accountable for a whole year’s CPD if an employee wasn’t employed for the whole of that year, the firm does have a responsibility to ensure that staff are competent.
Firms should also make sure that new staff members are aware of their responsibility to comply with CPD requirements.
16. How do the regulations apply to non-member regulated individuals?
Individuals who are regulated by ICAEW are within the scope of the CPD Regulations. These include:
- responsible individuals for audit,
- key audit partners for local audit,
- insolvency practitioners,
- those who are licensed for probate, and
- licensed practitioners under the licensed practice scheme.
These individuals are subject to the CPD Regulations in the same way as ICAEW members.
17. What if members find themselves in more than one category?
The requirements are not cumulative. Rather, the member must meet the CPD requirements for the role that has the highest number of CPD hours.
For example, if a member has one role that puts them in practice category 2, and another that puts them in not-in-practice category 1, they must undertake the CPD requirements of not-in-practice category 1 of 40 minimum hours.
We expect a member in that situation to apply their judgment to think about what their learning needs are across those multiple roles and act accordingly.
Firms are not responsible for the CPD that a staff member must complete due to a role outside of their employment with them.
18. Does the firm need to hold actual CPD records?
The regulations require firms to maintain records, but there's no stipulation of how firms must hold these records. This could be within a learning management system or it could be that individual employees are required to hold their own records. However, we expect firms to carry out some review of CPD records as part of their monitoring processes.
19. How will testing, investigation, enforcement work at ICAEW?
There will be two different ways in which ICAEW will monitor CPD.
The first is the way in which we already monitor CPD compliance, in that we will select a sample of members and ask them to submit their CPD records.
The second will be firm monitoring, which will be carried out as a standalone CPD visit. This will not be linked to any other regulatory or assurance visit that a firm may be subject to.
These visits will aim to gain an understanding of the firm’s CPD system and training regimes, as well as how training is rolled out and how monitoring is completed. We would then sample test some of the firm’s employee CPD records.
If we identify non-compliance issues with CPD records from sampling individual members, we will speak to the individual. We will then ask for a commitment from that person to remediate the CPD records – ie carry out the relevant amount of CPD – and we will follow that up. We also require the individual to let their firm know that they've been selected and that there was a problem within their CPD record.
If we carry out a firm CPD visit and identify an issue, we'd speak to the firm and ask for a commitment of how they would resolve the point. If it's on an individual CPD record, for example, we'd want them to give us a confirmation that they're comfortable this isn't applying to anyone else. We will follow up the following year to make sure those records have been remediated.
If we identify significant issues or repeat issues, we will report them to the Practice Assurance Committee and ultimately there is a route to the Conduct Department (formerly the Professional Conduct Department), however, that will only be for serious instances of non-compliance.
Resources for your staff
ICAEW has lots of free online content, including webinars, podcasts and insights. And, since the beginning of January 2023, all members have access to content from the faculties and communities.
- 01 Nov 2023 (12: 00 AM GMT)
- Updates made to reflect CPD Regulations coming into force.
- 09 Oct 2023 (12: 00 AM BST)
- Addition of webinar recording to page.
- 10 Jul 2023 (12: 00 AM BST)
- Additional FAQs added - questions 10 - 19.
- 13 Jun 2023 (12: 00 AM BST)
- Links added to the ICAEW ethics CPD course which is now live.