From 1 November 2023, these firms have a responsibility to ensure ICAEW Chartered Accountants and relevant persons are compliant with the new requirements and to maintain records that can be inspected by ICAEW’s Quality Assurance Department (QAD) on request.
Systems, responsibilities and policies
ICAEW has spoken to some firms as they begin their preparation for the changes. Conversations have revealed that many are embracing the changes as an opportunity to review their existing learning management systems and processes to ensure they are fit for purpose and can provide appropriate record keeping.
One of the key considerations for larger organisations is aligning different systems that track training. Meanwhile smaller firms are considering how Excel spreadsheets can be used to sufficiently capture their employees’ CPD. For both large and small firms alike, an area of particular focus is how firms ensure CPD can be verified, and whether members will be required to submit supporting evidence to their employer which will be retained.
As one large firm put it, they have a lot of data, but the challenge is making sure they’re identifying the right data and getting different systems to talk to each other. At this stage in the preparations, many firms are finding their IT teams are providing invaluable support.
Firms are also deciding who will hold responsibility for overseeing changes and monitoring staff CPD activities to ensure they meet requirements. For many this responsibility is sitting with the person or team responsible for learning and development, while others (usually larger firms) have quality assurance departments that are taking the lead.
Some firms have used the introduction of ICAEW’s revised CPD requirements to align their professional development policies for staff. For example, one organisation shared that they will be expecting all audit staff to comply with the highest CPD requirements – ie to complete 40 hours of CPD each year, with 30 hours verified – regardless of their client base or the professional body their staff area member of.
Another firm will be asking all client facing staff to meet practice CPD category 1 (40 hours, 30 verified) and those who are not client facing to meet practice CPD category 3 (20 hours of CPD, 10 hours verified).
CPD: Is your firm ready?
A practical guide to the responsibilities ICAEW firms will have for CPD from 1 November 2023. During this free webinar, we'll take you through the essential key steps to prepare your firm.
Key questions and answers
Initial feedback from member firms highlights some common questions, here experts from ICAEW’s Professional Standards Department and QAD provide answers.
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.
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.
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.
Do members have to use ICAEW’s Ethics CPD Course to meet the ethics requirement?
No. We encourage most members to use our new Ethics CPD Course, as its freely accessible and can be added to firms’ learning management systems. However, if a firm has an alternative, this is acceptable, as long as it meets the same learning outcomes, which they will need to assess.
The learning outcomes of ICAEW’s Ethics CPD Course are predominantly around understanding the content of the ICAEW Code of Ethics.
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.
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.
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.
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.
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.
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.
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.
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.
Get in touch
If you have any questions about CPD, don’t hesitate to contact us. Phonelines and webchat are available between 09:00-17:00 (UK time) Monday to Friday and 10:00-17:00 on Wednesdays (excluding UK bank holidays).
More on CPD and skills
Support on the changes to CPD requirements and how they apply to you, as well as the skills accountant need.
CPD self-assessment tool
Use our online tool to identify if you are affected by CPD changes and which CPD category is most applicable to you.Get started