Firm responsibilities for revised CPD 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.

Firms have responsibility for employees (including subcontractors and consultants) who are:

• 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.

• Read further guidance on different scenarios 

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.

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).  

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. 

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.

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.

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.

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.

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.

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.

We’ll also be hosting two webinars discussing the changes. On 27 September, there will be a webinar specifically for firms which will focus on verifiable CPD, which you can register for now.

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.

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.

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.

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. 

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.

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.

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.

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.