ICAEW’s revised CPD Regulations place specific responsibilities on firms. We look at what firms need to do and the questions they need to ask themselves.
When the revised CPD Regulations come into effect in November 2023, ICAEW members and relevant persons will be required to undertake a minimum number of hours of CPD, all of which must be based on their areas of work and the associated risk. Some of these will need to be verifiable.
The revamped approach also strengthens ICAEW’s ability to monitor and assure that ICAEW Chartered Accountants and relevant persons are doing sufficient CPD to deal with increasingly complex professional and regulatory environments.
ICAEW member firms and other firms will need to maintain records of CPD and make these available to ICAEW’s Quality Assurance Department (QAD) on request.
“As an ICAEW firm, you effectively need to display the professional capability, skills and knowledge that uphold the value of the accountancy profession and the qualification,” says Trevor Smith, Director, Quality Assurance, ICAEW. “And part of the way you do that is to take some of the responsibility for ensuring staff and principals are competent and stay up-to-date.”
“At ICAEW, we're trying to help you do that by saying there’s an element of firm responsibility involved in this,” he adds. “It's really about your practice risk management. It's about strengthening people’s skills and knowledge for the roles they do, and it’s obviously in the interests of the firm to make sure that's happening. So there are lots of wins for firms.”
"Other firms" means firms which:
have been granted a dispensation to use the description “Chartered Accountants” under the Regulations governing the use of the description Chartered Accountants and ICAEW general affiliates; and/or are registered by ICAEW for audit, local audit, investment business, probate or as a Licensed Practice which are not ICAEW member firms.
Firms need to prepare for the introduction of the revised regulations, but in reality many will have existing systems in place to monitor CPD, training and competence. And while the responsibility on firms may be new in terms of specific CPD requirements, this is something they should be doing in a broader sense.
Indeed, 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.
Whatever systems firms already have for monitoring training and competence, Trevor urges all firms to take this opportunity to look at their existing procedures and decide whether these comply or need amending to deliver the new CPD requirements.
“Start thinking about it now,” he advises. “It takes time to get these things in place. As a firm you want to make sure you're producing work that's to a high quality standard and complies with whatever requirements are out there.”
What firms have in place will obviously vary depending on their size and complexity. Some will have very formal structures and others will be taking a more ad hoc approach.
“Larger firms tend to have their own learning management systems and a central method of reviewing and controlling CPD and looking at exceptions,” says Liz Shaw, QAD Senior Manager, ICAEW. “But with the smaller firms it's likely to be more informal.”
“We don't want firms to think they need a complex system to do this because that absolutely isn't needed,” she stresses. “It's really more a case of having the right oversight and being aware of, and driving, the training.”
Firms need to start by making themselves familiar with the new regulations and guidance, then apply these to their own environment, and ask themselves: If somebody came along and said show me how you comply, how would we do that?
- 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?
- How do we check things so that at the end of the year we can show they’ve complied with the CPD Regulations?
“If somebody asked you those sorts of questions, you need to be able to demonstrate that you’ve done it within your firm,” says Trevor. “And some firms might need to make a few changes.”
A common question being raised by firms already is: Do I need to keep CPD records for everyone in a prescribed format?
“The answer to that is no,” emphasises Trevor. “You can look at it in a variety of formats. There will be no prescriptive way of doing it.”
ICAEW will, however, offer firms and members help and support, including a method of recording CPD in future via ICAEW’s website.
“There will be examples of how you could do it,” says Trevor. “But there are lots of different approaches, and it may well be that what you do already meets the new requirements.”
“We're not trying to make it too onerous,” he adds. “We're not saying you only have to do it one way.”
“We’re very aware that different sizes and types of firms will want to do it differently and that's very akin to how QAD carries out monitoring in all our regulated areas. We're very proportionate in what we do and that proportionality will flow through into our monitoring of CPD.”
Another element of the new framework is the introduction of verifiable hours as part of minimum requirements. “This is something we've not had before, so firms have been asking what it means,” says Liz.
Verifiable CPD is any activity that enables members to keep up to date and proficient in their role, and which can be evidenced – i.e., is fact based and can be corroborated.
“In the past people have often thought of CPD in terms of structured and unstructured,” explains Trevor. “But we're now talking about verifiable hours within total CPD hours and verifiable isn't just courses. It's this wider bank of building your own knowledge that counts as verifiable.”
ICAEW firms need to ensure they understand what counts as verifiable hours and that their staff understand that too. “Then you need to make sure they're recording that,” says Trevor.
Many firms already mandate and record training, but this type of training tends to involve things like courses and seminars, whether face-to-face or online. “It’s less likely that firms will be mandating things such as technical research for an article or presentation,” he explains. “Yet those could count as verifiable. And if people aren't aware of that, they won't be putting these activities on their CPD record.”
“As a firm, you want to make sure staff are giving themselves credit for all the things they're doing,” he stresses.
The consultation on the new CPD framework included some common examples of potentially verifiable CPD, and ICAEW will provide more detail in the run up to the launch of the revised regulations.
Under the new framework, it is largely up to firms and individuals to decide what mix of learning meets their needs. But there is one mandatory requirement and that is for annual ethics training aligned to ICAEW’s Code of Ethics.
To support firms and individuals in complying with this, each year ICAEW will produce a free online ethics CPD course for all members and relevant persons.
Members don't have to use that training, however. They can get equivalent training through their firms or an external provider, as long as it aligns with the learning outcomes of ICAEW’s training.
Where firms already provide their own ethics training, they should look at this and determine whether it meets the learning objectives of ICAEW’s training. “If it does, you can document that and continue using it,” says Trevor.
Firms will also be able to take ICAEW’s ethics training and embed it in existing learning management systems or use it within their wider training. “You should be able to take our ethics training and either top and tail it with your own procedures or add additional elements,” explains Liz.
In the run up to the November launch of the new requirements, ICAEW will be supporting firms and members through the process by providing further guidance and user-friendly compliance tools, as well as compiling a comprehensive list of frequently asked questions (FAQs), case studies and more information on QAD’s monitoring process.
- Visit icaew.com/cpd to view the latest information, guidance and resources.
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