CPD changes for ICAEW members and firms
The ICAEW recently announced a major overhaul of its Continuing Professional Development (CPD) regulations that will come into force on 1 November 2023.
Of the changes that have been announced the one that stands out is a return of the requirement for a minimum number of hours to be spent on CPD activity.
The ICAEW has published considerable guidance on the changes on its website. But what are the key implications for ICAEW members and firms and how do they need to prepare for the changes before they come into force later this year?
Firstly, individuals will need to establish if they are within the scope of the CPD regulations. Generally, all ICAEW members will be unless they are retired or on a career break.
This includes any members in a company director, charity trustee or a similar role. Non-ICAEW members that are regulated by the ICAEW for audit, insolvency or probate will also be subject to the CPD regulations.
Minimum number of CPD hours
The next stage for anyone affected by the CPD regulations will be to ascertain what their CPD obligations are. The minimum number of CPD hours varies depending upon what their responsibilities.
Those affected persons with the greatest responsibility or who perform the most complex work will be considered to fall within Category 1 and be required to undertake 40 hours of CPD each year. Those affected persons with less responsibilities or who perform less complex work will fall in either Category 2 or 3 and be required to undertake either 30 or 20 hours of CPD each year respectively.
A proportion of the CPD activity will need to be verifiable, with evidence of its completion that is objective, corroborated and retained.
The precise amount of verifiable CPD will depend on whether the person is working in practice or not.
If uncertain the ICAEW website has some useful tools available to help you determine whether you are subject to the CPD regulations and what category you fall into.
Planning CPD activity
Having established your CPD obligation it’s time to plan the actual CPD activity that will be performed.
The ICAEW’s requirement of Reflect, Act and Impact remains. So, it’s important to plan CPD activity that is relevant to your role and the work that you currently undertake or are planning to perform in the future.
Time should be spent at the start of each CPD year to consider what technical developments there have been over the last year or what is due to come into force and to reflect on how these affect your development needs.
It is important to ensure that any specialised areas that you are involved in are addressed. Your planned CPD should also cover any non-technical skills that need developing, such as management or leadership skills in advance of an anticipated promotion.
Note that everybody subject to the CPD regulations must undertake a minimum of 1 hour of verifiable CPD on Ethics each year. The ICAEW has developed an online Ethics course that will help facilitate this.
Handling common criticisms
A common criticism that that is often made of CPD regimes that require a minimum number of hours to be performed is that it can result in non-relevant CPD being performed to reach the required target. Often with a last-minute rush towards the end of the year in a scramble to achieve the required number of hours.
By effectively planning your CPD activity at the start of the year it should result in the target being met through the performance of CPD activity that is relevant to your role.
Indeed, activity that isn’t relevant to your role and training needs doesn’t really count as CPD at all.
It is also easier now to plan the timing of CPD activity to when it best fits in with your workload. Most CPD providers such as Mercia now offer online training on-demand rather than relying on face-to-face courses. These can be taken at any time or location that is inconvenient to you.
Demonstrating supporting evidence
With the need to be able to demonstrate that sufficient CPD activity has been undertaken it will be necessary to consider how it will be recorded, with supporting evidence for any verifiable CPD performed. CPD records must be maintained in a format that enables inspection by the QAD on request.
For those persons who work at an ICAEW member firm, or any other firm regulated by the ICAEW, it’s likely that the firm will be able to assist with this. This is because firms now have a specific responsibility to monitor compliance with the CPD requirements and to ensure that adequate records are being maintained.
It is hoped that this new requirement will better enable the ICAEW’s ability to monitor whether relevant persons are carrying out sufficient and appropriate CPD and encourage firms to review their processes and enhance their practice risk management.
Whilst at first these updated CPD regulations may seem like another complex area of compliance for accountants and firms to have to deal with, through better understanding of the regulations hopefully they will come to appreciate that this is an opportunity to better ensure that the right CPD activity is being performed, at the right time, which ultimately results in an improvement in the quality of the services being provided to clients.
How can Mercia help with your CPD?
Here at Mercia we are able to help with an extensive bank of on-demand, in person and live online training courses, on technical accounting and tax topics, or professional skills.
You might also be interested in
Mercia is one of the leading providers of training and support services to the UK accountancy profession. Over 7,000 firms attend our training events, rely on our technical products and promote themselves using our marketing services.