Practice Assurance guidance for sole practitioners and new / smaller firms
Standard 3: Competence
Your firm should ensure that all principals, staff and subcontractors are competent to carry out their work.
Set out below are guidance and observations from ICAEW Quality Assurance monitoring reviews as well as support, including our top tips to help you comply.
To ensure that principals and staff (including subcontractors) are competent, your firm will need to have appropriate arrangements in place for:
- development and training;
- access to up-to-date technical and non-technical reference material and information sources; and
- provision of consultation where necessary.
For firms with staff:
- allocation of staff to assignments consistent with their capabilities; and
- appropriate supervision and review of work.
On this page
Development and training
The level of skills and knowledge required of an individual depends on the work to be carried out and the level of responsibility.
Your firm should ensure the development needs of all principals and staff are formally assessed on a regular basis through, for example, manager reviews and appraisals and informally through peer discussions.
Your firm should ensure that staff keep up to date and undertake appropriate development and training to enable them to carry out their work competently. We recommend that all staff have a formal performance appraisal at least once a year that includes a discussion of their development and training needs.
Continuing professional development
All professional staff should comply with the CPD requirements of their own professional bodies. ICAEW members should record their CPD in the reflect, act, impact format.
Technical reference material
Your firm should ensure that staff have access to the relevant technical and other information they need.
Your firm should encourage staff and subcontractors to consult with others in the firm on technical, ethical and other issues whenever appropriate. It may be necessary to seek external advice if the appropriate expertise is not available within the firm.
Sole practitioners may find it helpful to set up arrangements with another firm or consultancy organisation in order to seek advice and information, as well as making full use of ICAEW’s website, helplines and library and information service.
The recruitment process should include an assessment of the fit and proper status and integrity of applicants and their competence and relevant experience to carry out the work that will be assigned to them. Your firm is advised to take up references, including those of previous employers. It is also advisable to see original rather than photocopied certificates providing evidence of qualifications.
Below are some of the practices your firm may put in place to help it comply with this standard. These are divided between what we consider to be essential practice and best practice that further assist with a firm’s quality and risk management. We have also added our top tips to help you comply.
Complete the Practice Assurance compliance review checklist to assess whether you have adequate procedures in place to enable you to comply with this standard.
Top tips to help you comply
- Sign up to a block of courses provided by a training provider.
- Make use of the webinar versions of courses - these save travel time. It is a good idea to watch these with someone else so you can discuss issues arising. If you are a sole practitioner with no staff you could watch with other accountants in practice that you know.
- Look for local events run by our local societies.
- Join one of our faculties or communities to keep yourself up-to-date with topics relevant to your practice. These all provide newsletters, helpsheets and webinars.
- There is a plethora of free resources on the UK GAAP and other topics on our website.
- Comply with CPD requirements and keep records on file. ICAEW members should record their CPD in the reflect/act/impact style.
- Relevant technical reference material should be available and kept up to date. Eligible ICAEW firms have free access to Bloomsbury Professional’s comprehensive online library, comprising more than 60 titles from some of the country’s leading tax and accounting subject matter experts.
- Keep names of potential external consultants on file (not necessarily a formal agreement with each one).
- Keep written records of consultations on significant issues.
- Use of ICAEW technical and other helplines.
- Conduct interviews when recruiting.
- Obtain written or oral references for new employees.
- Fit and proper, independence and confidentiality forms should be signed when new staff join. These should be updated if circumstances change.
- Give a written statement of employment (including job description and the principal terms and conditions) to your employees and keep a copy on file.
- For subcontractors, put a process in place to satisfy yourself that they have an adequate level of competence and that they maintain their competence. Subcontractor agreements should be put in place and they should include a confidentiality clause.
Best practice for firms with staff
- Use the helpsheets listed below to help you with recruitment of staff and subcontractors.
- Require each applicant to complete an application form, obtain written references and verify qualifications. A signed contract of employment and job description should be retained on file and reviewed annually.
- Produce and follow induction programmes.
- New staff should have a probationary period.
- Maintain a personnel file for each member of staff.
- Annual fit and proper, independence and confidentiality forms should be signed and kept on file. Principals and staff should declare any changed circumstances when they happen.
- Have a development process in place that encourages consideration of professional expectations, key risks and requirements of key stakeholders.
- Record the results of key development and training activities.
- Follow-up training needs and record the outcome.
- Reflect any learning and development points emerging from any quality review process into training and development assessments.
- Obtain relevant technical reference material and subscribe to updating services.
- Internal (or external) consultation may be required in specific situations.
- Have a signed external consultant agreement on file.
Helpsheets and further support
The following helpsheets relevant to standard 3 are available:
- Consultation arrangements
- Contracts of employment
- Employing a subcontractor
- Employment references
- Fit and proper declaration