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Getting started with compliance

Getting started with compliance part 1

Author: ICAEW

Published: 31 May 2021

Are you thinking about starting a new firm or moving into a new area of practice? What do you need to know when entering the regulatory space for the first time and how can ICAEW’s Professional Standards Quality Assurance and Regulatory Practice teams support you?

As a member setting up in practice, you need to comply with a range of requirements, rules and regulations. Some of these apply across the board for all new entrants; others may depend on the types of work you intend to carry out, for example in specific regulated areas such as audit, probate, investment business and insolvency.

In part one of this article, we look at the need for a Practising Certificate (PC) and how to register your new venture with ICAEW. Parts two and three will stress the importance of considering your business structure from the outset, and provide some tips on how to develop a compliance mind-set and keep ICAEW informed as your business evolves.

Public practice

The first step for all members is to decide whether they are engaging in public practice and therefore need a PC. ICAEW has produced a statement setting out what falls within the definition of public practice. This includes annexes outlining which activities are considered accountancy services and clarifying situations where members may be unsure whether they need a PC.

“As soon as you decide to go into practice to help someone deal with financial matters, such as tax returns, you need to look at whether you require a PC,” explains Nick Reynolds, Head of Audit, ICAEW Professional Standards Department. Some members make the mistake of thinking bookkeeping, for example, doesn’t count as an accountancy service. Yet, this activity is actually listed first in the annex, followed by maintaining client payroll and preparation of management or financial accounts.

“People may be doing a little bit of bookkeeping work for friends and billing for it, and don’t realise they’ve actually slipped into public practice,” adds Dean Neaves, Senior Manager, Quality Assurance, ICAEW. Even if someone only works for family and friends, or for small charity groups, they will need a PC unless no fee is charged for the work, or a token non-monetary reward or benefit is received for the work. 

Members also need to consider Anti-money Laundering (AML) requirements and to do so early on.

Getting registered

Once you decide you are engaging in public practice and need a PC, you need to register your firm with ICAEW and apply for the PC. “The starting point when you want to set up in practice is that you have to tell us and register with us,” says Neaves. And this doesn’t just apply if you’re setting up a firm. “Sole traders who maybe don’t think they have a separate firm also need to tell us they’re practising,” adds Elaine Griffiths, Director of Regulatory Practice at ICAEW. “Some people don’t realise this.”

Firms usually register as part of the PC application process. ICAEW members setting up a firm for the first time should supply the required information on the PC application form. Alternatively, if a member already has a PC (perhaps they are leaving a larger practice to set up alone), they should notify ICAEW of a new entity by emailing firms.admin@icaew.com and sending a copy of their letterhead and Professional Indemnity Insurance (PII) documents for review. 

If your firm is undertaking regulated work, you also have to register specifically for the area in which you intend to work, such as audit or probate. The practising certificate (PC) brings with it some specific requirements. For example, you must have PII and adhere to ICAEW’s Practice Assurance Regulations and standards. These are basic requirements for anyone setting up in public practice. If you want to carry out specific regulated work, you will then have to register and adhere to the associated regulations and standards for those areas. We will look in more detail at these areas in future articles, starting with how to become audit registered.


To support members new to practice, the ICAEW Professional Standards Department has produced online guidance covering everything from common pitfalls for new firms to core regulatory areas such as AML.

New firms can also access the Quality Assurance two-part webinar on practice assurance fundamentals. Part one covers the main areas where practitioners ask for clarification and guidance. Part two looks at the application of practice assurance principles to specific services, such as clients’ money and AML, investment business and probate.

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