The vast majority of accountants have always taken the need to stay up to date and knowledgeable seriously. But with the new ICAEW rules for accountants in practice and in business now in force, the need to take a more systematic approach to the completion of CPD is paramount. What are the new ICAEW CPD requirements and what do you need to do to meet them? Find out in this whitepaper.
Gearing up to meet the CPD Challenge ICAEW CPD Changes: What do they mean for you?
The vast majority of accountants have always taken the need to stay up to date and knowledgeable extremely seriously. But with the new ICAEW rules for accountants in practice and in business now in force, the need to take a more systematic approach to the completion of CPD is paramount.
What Is CPD and How Is It Changing?
CPD (Continuing Professional Development) is the process of ongoing learning that continues throughout a professional’s career. It enables individuals to stay up to date, remain relevant and prepare to meet the challenges of the future. Each of the UK’s accountancy bodies has a CPD scheme. They are required to by their membership of IFAC, the global organisation for the accountancy profession, and by the Financial Reporting Council. The FRC delegates its regulatory responsibilities to four Recognised Supervisory Bodies (RSBs): ACCA, CAI, ICAEW and ICAS, and so has the right to lay down conditions, such as an effective CPD policy.
These CPD schemes are defined either by the “inputs” – how many hours you are required to spend doing CPD, or by the “outputs” – the things you have decided you need to achieve to remain relevant, up to date and ready for the challenges of tomorrow. Proponents of inputs-based systems point to the ease of measurement and the fact that it is much harder to misrepresent whether you have done your CPD. On the other hand, proponents of outputs-based systems say that they are more rigorous, and that measuring compliance in hours turns the process into a cynical tick-box exercise.
Personally, I have never agreed with that point of view. Hours based systems are only box- ticking if the individual in question chooses to engage with them in a cynical way. As Chair of ICAEW's Practice Assurance Committee, I certainly came across plenty of individuals who, when asked why they had not done any CPD, said: “I reflected on my current role and learning needs and concluded that I had none.”
Outputs-based seem inherently more liable to abuse.
ACCA have always adopted the inputs-based approach. Their members are required to complete 40 hours of CPD, 21 of which must be verifiable – where the learning activity is relevant to your career, applied in the workplace, and provides evidence that you undertook the learning. ICAEW has always had an outputs-based policy. Until now that is…. Under some pressure from the FRC, and after a consultation process with members, ICAEW has switched to an hours based approach. All members now have to complete a minimum number of CPD hours every year. This will include a mandatory annual ethics CPD requirement, and an overall number of hours of CPD, depending on which category of risk their work places them in.
For Practices For those in Practice, the risk categories are:
CATEGORY 1 This includes Public Interest Entity auditors, and members involved in audit regulation, monitoring or enforcement within the firm. REQUIREMENT 40 hours CPD of which 30 must be verifiable.
CATEGORY 2
Members in Practice as well as those involved with small entity audits. CATEGORY 3
Responsible Individuals and members involved with large corporate audits, as defined in the Companies Act 2006, pension scheme audits and charity audits. REQUIREMENT 30 hours CPD of which 20 must be verifiable.
20 hours CPD of which 10 must be verifiable. REQUIREMENT
If you are unsure about which category you fall into, consult the ICAEW guide here.
The Responsibility of the Practice Practices have always been responsible for ensuring that the accountants in their team complete appropriate CPD. However, it has never been the primary focus of a QAD (Quality Assurance Department) visit, and it has been very difficult for the Practice Assurance Committee to penalise a firm that is lax. All that has changed. With the switch to an hours-based system, QAD will find it much easier to assess whether a practice is taking CPD compliance seriously. So, when you receive the email from QAD, scheduling a visit, there will be one more set of records you need to produce. If the CPD service you use doesn’t give you easy access to those records, you will have the unenviable job of asking for, and chasing down, the CPD records of every accountant in your team. If it turns out they don’t have the evidence, it may well be too late to sort the problem out.
So, you need to get organised with the right provider as soon as possible.
For Businesses For those in business, the risk categories are:
CATEGORY 1 Those in CFO/senior positions in Public Interest Entities, Central Government, Large Charities, or Internal Audit. Accounting Officers at Public Sector Bodies, Statutory Officers at Local Authorities and Trustees of Large Pension Funds. REQUIREMENT 40 hours CPD of which 15 must be verifiable.
CATEGORY 2
Those working outside of Practice who do not fall into category 1 or 2. Those working or volunteering at charities. CATEGORY 3
Those in CFO/senior positions at Large Companies, Public Sector Bodies or charities (not large). Financial Controllers & Financial Reporting Officers in Public Interest Entities and Central Government Departments. Trustees of Pension Funds (not large). REQUIREMENT 30 hours CPD of which 10 must be verifiable.
20 hours CPD of which 5 must be verifiable. REQUIREMENT
If you are unsure about which category you fall into, consult the ICAEW guide here.
All those affected by the revised CPD regulations must complete at least 1 hour of verifiable CPD on ethics each year. Critically, this requirement will extend to non-ICAEW members registered with ICAEW as Responsible Individuals, Key Audit Partners, and insolvency practitioners.
The Responsibility of the Business/Employer Finance Departments in business are not regulated by the accountancy bodies, and so you may think that you do not have a responsibility to provide CPD to your finance professionals. And in a way you'd be right, but if you want to build and retain the best team, you may need to think again. With all finance professionals now having to complete and maintain records of their CPD, you can mark yourself out as an employer of choice, by providing the best CPD available to everyone in your finance team.
After all, if you are going to sign off their expense claims in any case, why not make a benefit out of your generosity.
The Need for Quality The quality of online CPD provision for accountants has always been poor. Most providers have migrated from face-to-face provision, and while their technical credentials are strong, they are often not educational specialists. Add in the fact that what works in the classroom or lecture hall does not work well online, and you have a recipe for some pretty dreadful digital learning experiences. This situation has been exacerbated by the pandemic, as smaller, often local providers found themselves unable to run face-to-face events and therefore without a source of income. Many quickly learnt how to run a webinar, adding to the plethora of poor learning experiences available. All this encourages the feeling that CPD is an unhelpful additional burden instead of being a source of competitive advantage for a practice. Good online learning can be immersive and engaging. It can achieve great things, not only in terms of knowledge but also in the development of new skills and behaviours. And it can help firms and finance departments develop and retain great accountants who feel valued in their roles.
Benefits of Building a Learning Culture While it is important for an accountant to make sure they are up to date, it is also important to develop in other ways:
Either as a Finance Business Partner in-company or as a Trusted Business Advisor in Practice, develop the analytical tools and business acumen you need to expand your horizons.
Business advisory
Become more effective by working on your interpersonal skills such as emotional intelligence, negotiation or conflict management.
Personal effectiveness
Leadership
Move into financial leadership roles by developing your management skills
Achieve your career goals, by developing the skills, knowledge and experience you need to take the next step.
Career advancement
If you can achieve all these goals, as well as remaining technically up to date, then no one could say your CPD was a box ticking exercise. And all of that is possible, if you find a provider with the right range.
Top Tips for Making the Most of Your CPD Once you understand the new rules, you can treat them as an opportunity to transform your approach to developing your team. And to help you with that, here are our three top tips for making the most of your CPD…. 01 02 03 Get organised Choose the best Broaden your horizons Don’t leave this
Take a broad view of the professional development needs of your team. As well as staying up to date, you should aim to develop them as fully rounded professionals.
Don’t compromise on quality. Show the accountants in your firm that you appreciate their long hours and hard work by choosing the best CPD available.
until the last minute. Find a provider that will be your partner, providing secure storage of records and easy administration for you.
This whitepaper is written by Alan Nelson. After studying economics, Alan began his career in accountancy before moving into senior management positions in the book trade. He founded Nelson Croom, the publisher of accountingcpd.net which he has run ever since. He is a member of IFA’s Regulatory Committee and a past Chair of ICAEW’s Practice Assurance Committee.
Nicola Dann manages the Strategic Client Relationships for accountingcpd who develop online CPD resources for accountants covering both technical and professional skills.
accountingcpd.net provides flexible, effective online CPD that is not just about ticking boxes. It is designed to equip accountants everywhere to succeed in this diverse, changing, and important role. We work with expert authors and leading professional bodies to develop CPD you can trust and that will help you grow.
Subscriptions are available for individuals and teams. Find out more about team subscriptions: w www.accountingcpd.net/licence m nicola.dann@accountingcpd.net O 020 7582 3309
Page i Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10Made with FlippingBook Digital Publishing Software