Save content
Have you found this content useful? Use the button above to save it to your profile.
ICAEW HQ
ICAEW

ICAEW holds firms responsible for CPD compliance

by

ICAEW’s revised CPD regulations will hold accountancy firms responsible for employees complying with CPD rules and maintaining their records. 

24th Apr 2023
Save content
Have you found this content useful? Use the button above to save it to your profile.

From 1 November 2023, revised continuing professional development (CPD) regulations from the Institute of Chartered Accountants in England and Wales (ICAEW) will put the responsibility on accountancy firms to ensure their chartered accountant employees are complying with the CPD requirements and are keeping records. 

ICAEW said these changes would strengthen the professional bodies’ ability to monitor its members and ensure they are “undertaking sufficient CPD”. 

As a result of the CPD shake-up, ICAEW member firms and those regulated by the accountancy body will have to ensure chartered accountants and relevant persons are maintaining records of the CPD hours they’ve undertaken and have this available for the ICAEW’s Quality Assurance Department (QAD) to investigate on request.

While the learning will be mostly up to the needs of each firm, it will be mandatory for members to take an annual ethics training aligned to ICAEW’s Code of Ethics. ICAEW will produce a free online ethics CPD course to support firms and members to comply with this compulsory requirement.  

ICAEW said that these revamped rules will “provide much stronger assurance to oversight regulators, politicians and the public that ICAEW chartered accountants are maintaining and enhancing their competence within ever-increasingly complex professional and regulatory environments”.

Restore trust

Julia Penny, the president of ICAEW, set up a council working party when she was vice-president to explore what the institute could do to restore trust in the profession following a number of high-profile audit failures such as Carillion. “We’re in an environment, in a very general sense, where people don’t automatically trust somebody just because they’re a professional,” Penny said earlier this year

“So we were looking at what we could do better in future,” explained Penny. “And we were asking: ‘Are we doing everything we should to ensure our members are competent to provide the best advice and the best service to clients?’”

As part of these conversations, CPD emerged as a key theme. With the regulatory environment rapidly changing, Penny said the ICAEW wanted to “ensure our requirements for CPD were keeping pace with those changes”.

Three categories

There will also be three categories of CPD for practice and non-practice members, depending on the risk of the work they undertake and the levels of seniority.

Penny explained that the different categories are due to there being members ranging from CFOs of major businesses to small high-street practitioners: “To expect the same of all of them is not sensible and would not reflect the different risks to the public in the nature of the work carried out,” she said.  

For example, the highest category (category 1) will be for key audit partners, engagement partners, those signing client assets sourcebook (CASS) audit or assurance reports and those who lead or manage public interest entities (PIE), plus those providing direct or indirect tax services to large companies. These members will have to undertake 40 CPD hours (30 hours must be verifiable).

Members that fall into category 2 will be required to undertake 30 hours of CPD (20 being verifiable). The work that falls under this category includes probate work, non-reserved legal services, providing direct or indirect tax services and providing audit services that don’t fall under category one. 

These two categories have some overlap, including those that spend more than 30% of their time on audit engagements for PIEs.  

Individuals whose work does not fall into either of these two categories will fall into category 3, and are only required to undertake 20 hours of CPD with 10 hours being verifiable.  

“A driving factor for the CPD categories has been the degree of risk to the public in the service or work that’s being undertaken,” said Duncan Wiggetts, chief officer of ICAEW’s professional standards department. “If you’re doing something that’s very complex but it’s not going to have a big impact on the public then it’s unlikely to feature in CPD categories 1 and 2.”

No different?

The responsibility falling on firms to ensure chartered accountants are complying with CPD requirements is a new responsibility from November, although ICAEW said many firms already have existing systems in place to monitor CPD training and competence. The institute noted in an update that “this is something they should be doing in a broader sense”.

ICAEW pointed to the audit regulations that specify that firms are required to make sure their principals and employees are competent to do audit work.

Tags:

Replies (11)

Please login or register to join the discussion.

avatar
By carnmores
25th Apr 2023 15:53

they mean someone else can pay to check compliance

Thanks (4)
avatar
By Hugo Fair
25th Apr 2023 19:45

"ICAEW set up a council working party .. to explore what the institute could do to restore trust in the profession following a number of high-profile audit failures such as Carillion"
... and they believe that public trust (good, bad or indifferent) in their local accounting practice is affected by 'high-profile audit failures'? Does their ivory tower even have a foot on the ground?

All that happens is that certain companies (look away now mods) make it easier & easier to pick up CPD 'points' ... a process known as 'stocking the larder' by people I know outside the accounting profession (but from other sectors where you have to list your hours annually) ... irrespective of whether any new knowledge, let alone skillsets, was acquired.

Although Carnmores puts it more succinctly, it's another new responsibility imposed by the ICAEW on others (to do what the ICAEW was meant to be monitoring in the first place)!

Thanks (5)
By ireallyshouldknowthisbut
26th Apr 2023 10:41

They seem to be just selling a barrage of courses.

On the plus side structured CPD can include

"Attending or participating in: ...peer learning discussion groups"

Is that Aweb? if so I got about 250 hours a year.

Bizarrely you get CPD just for being active in the ICAEW. "Participation in meetings/discussion groups on technical topics, for example, ICAEW District Society meetings"

NB for a small practice you seem to get dragged into category 2 (20 hours verifiable) just for having a single high net worth client [assets over £10million, but how do we know this?] , or a single non-resident landlord.

Thanks (2)
Replying to ireallyshouldknowthisbut:
avatar
By carnmores
26th Apr 2023 11:17

Hahaha

Thanks (1)
By Nebs
26th Apr 2023 11:41

When can we expect the announcement telling us about the reduction in annual membership fees?

Thanks (2)
Replying to Nebs:
avatar
By carnmores
26th Apr 2023 12:55

thats a cracker

Thanks (1)
avatar
By tedbuck
26th Apr 2023 12:55

I think that the accountancy bodies are now competing with the civil service to see who can produce the biggest bar to doing a job profitably.

Is it beyond their wit to appreciate that to do the job we do we have to do CPD? I know the big firms put their trotters in it regularly but that is greed and bad management which small firms cannot afford. I really don't see why we should pay for the errors of the Big 4 and those who would cover up for them?

I am getting a bit sick of the rubbish being spewed out by the 'governing bodies' - I mean have you read some of the stuff they push out with their CPD reviews - if it were told to you you just wouldn't credit it. Wokespeak at its worst. And we are paying these people to sit there and pontificate to us.

Thanks (4)
avatar
By rememberscarborough
26th Apr 2023 13:13

CPD - A quick poll of most accountants registered with professional bodies would show the vast majority only do it because they have to not because they derive any benefit from it. That being the case surely it's clear that the whole CPD industry and the accounting bodies are failing its members completely?

The main reason for this? Most CPD courses are theoretical yet the vast majority of accountants are practical people so require training that addresses these practical needs. However, since very few jobs are exactly the same I'm not holding my breath over any useful changes in the near (or distant?) future.

Thanks (1)
avatar
By paulwakefield1
27th Apr 2023 09:56

Well I'm going to buck the trend. I always thought the relaxation in the CPD rules a decade or so ago was strange and now we seem to be going back to largely how it used to be albeit with rather more flexibility.

Surely we should all be keeping up to date? There are plenty of ways to do that and plenty of good courses amongst the dross. The ICAEW proposals are far from onerous if you are in Cat 3 which most will be.

Having read the guidance, the only change I have to make to what I currently do is add the number of hours to my record which I have to keep for the current CPD requirements anyway.

Oh - I will have to do a 1 hour ethics course once a year. But hey ho.

Thanks (0)
avatar
By JackH
27th Apr 2023 12:14

I told my professional bodies that the only CPD I was going to do was to send them regular examples of my work so they could mark it. CPD is just shining flashlights up our bottoms out of idle curiosity to verify the inevitable. A specialist would be insane not to keep up with their subject and CPD cannot not prevent the unscrupulous. They know they are at it and no CPD is going to protect the public. Meanwhile the virtue signalling and Government appeasement of professional bodies just makes all their members poorer and more burdened with red tape, so less able to do the only thing that matters; look after their clients.

Thanks (1)
Replying to JackH:
avatar
By carnmores
27th Apr 2023 13:20

love to know how they responded !

Thanks (0)