Firm responsibilities for revised CPD Regulations

The revised CPD requirements

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.

Use ICAEW’s key steps guide and FAQs to help with this review and ensure your firm is prepared.

Ultimately, you have a responsibility to ensure your staff are competent for the work they carry out.

Webinar: is your firm ready?

On 27 September 2023, ICAEW hosted a webinar outlining what the changes to CPD Regulations mean for firms and answering key questions.

Key steps to take

1. Review the revised CPD Regulations and supporting guidance to help your firm’s ICAEW Chartered Accountants and relevant persons correctly assess which CPD category they sit in.

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:

• Guidance on CPD categories.
• ICAEW's CPD self-assessment tool, designed to help members determine which CPD category is most applicable to them, based on the type of work they do.  

2. Verifiable CPD hours – what are these and what can be included?

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.

3. Ethics training – determine the training your firm will use.

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.

4. Recording CPD – establish the process for recording CPD in readiness for review.

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:

• Check you have adequate processes for recording all CPD for ICAEW Chartered Accountants and relevant persons within your firm.

Monitoring

The ICAEW CPD year runs from 1 November to 31 October. The revised CPD Regulations are effective 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.

We understand that firms may have different CPD years. They may be aligned to the organisation's financial year, for example. We don't expect firms to change their CPD year, and we will consider this in our monitoring.

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.

Support for sole practitioners

Free and value-for-money resources

To support you in meeting the new CPD requirements, we’ve made more ICAEW resources freely available to all members, including removing the paywall for many of our faculties and communities. All members can now access material from the Audit and Assurance Faculty, the Corporate Reporting Faculty, the Tax Faculty, and a number of the ICAEW communities. 

Our aim is to ensure there are plenty of resources for members in these specialist areas, and much of that material can count as verifiable, when using the AddCPD tool.

Free content from other organisations can also contribute to your CPD, if relevant to your professional development. Examples could include FRC reports or webinars from HMRC. If you are able to receive or download proof that you’ve attended or participated in a webinar or event, then this activity can count towards your verifiable hours.

Verifying CPD

There are lots of options and sources of CPD activities that can be independently verified. We have produced detailed guidance outlining examples of evidence that we would expect for CPD to classify as verifiable. 

We appreciate that when you're working as a sole practitioner, some of these options might be more difficult, in particular there are no senior managers to sign your on-the-job learning form. However, there may be other ways to verify on-the-job CPD activities. For example:

• If you consult a technical expert to get more information to resolve an issue, could you provide evidence of your communication with that expert?
• If you carry out technical research for a client-specific issue, could you demonstrate this by way of the file note you prepared, or the report issued to the client?

Meanwhile, if you're carrying out research on icaew.com you should be able to use the new AddCPD tool to verify your activities. The tool appears at the bottom right of your screen when you are logged into the site. It enables you to log how long you were viewing, listening or reading content on a webpage, as well as what you learned, and add this as an activity on your online CPD record. 

Tax services for high-net-worth clients

For the purposes of the CPD Regulations, we define high-net-worth individuals as those with a net worth greater than £20m. If you’re providing any services for high-net-worth clients this work is likely to be higher risk and subject to higher levels of attention and scrutiny, for example, from HMRC.

The additional complexity and risk mean that undertaking any amount of work for high-net-worth individuals - even if it's for a single client - means that you will fall into practice CPD category 1.

It’s not about how much of your time you spend doing this work. The fact that you do it at all means you need to be as competent and up to date as you can be on the emerging technical aspects, and that’s why it puts you in practice CPD category 1.

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