ICAEW's updated CPD Regulations, effective from 1 November 2023, introduced new responsibilities for firms. As CPD monitoring visits commence, here are key reminders of the requirements and insights into what reviewers will focus on.
According to Sophie Wales, ICAEW’s Director of Regulatory Policy, firms regulated by ICAEW have three main duties under the CPD Regulations. First, they must ensure that all ICAEW members and regulated individuals meet the minimum CPD hours for their category, including verifiable hours and mandatory ethics training. Second, they need to maintain records of these hours. Lastly, these records must be available for inspection by the Quality Assurance Department (QAD) when requested.
Practical Steps for Firms
In practice, firms need to:
- Implement a process to monitor and review employee CPD records.
- Ensure individuals have accurately assessed their CPD category.
- Confirm that employees meet the minimum hours, including verifiable and ethics training.
- Retain CPD records for three years after the end of each CPD year.
Determining CPD Categories
The CPD category determines the required minimum hours. “Identifying the correct CPD category for each employee is crucial,” Wales emphasises. Some firms adopt a blanket approach, assigning all professional staff to Category 1, which has the highest requirements, or allocating certain departments, such as audit, to this category.
Liz Shaw, Senior Manager at QAD, explains that other firms let staff determine their own categories. “There’s no right or wrong way,” says Shaw. “However, when we visit firms to assess compliance, we expect them to ensure staff have assessed their category correctly and are fulfilling their CPD obligations.”
Wales clarifies that firms are only responsible for ensuring CPD compliance related to an employee's work for the firm. If an individual has additional roles outside the firm that affect their CPD requirements, these are not the firm’s responsibility.
For guidance on CPD categories, Shaw suggests visiting ICAEW’s website or using the CPD categories tool. If there’s still uncertainty, firms can contact the ICAEW helpline for assistance.
What is Verifiable CPD?
Firms often ask what qualifies as verifiable CPD. Shaw explains, “Verifiable CPD requires evidence that is objective, independent, and can be corroborated.” This means that the evidence must be factual, come from an independent source, and be retained in a format that can be included in an individual’s CPD record.
Verifiable CPD is not limited to structured courses—it can also include activities such as peer discussions, on-the-job research, or writing articles, provided there is independent evidence.
ICAEW also requires members to complete one hour of ethics training annually, which must be verifiable. Firms can use ICAEW’s ethics learning course or choose their own, as long as it meets ICAEW’s ethics learning objectives. If a firm delivers the training in a group setting, they must document attendees to verify completion.
Record-Keeping Requirements
Firms must keep records of their employees' CPD activities. Shaw emphasizes that there is no prescribed format, but records should detail the total hours completed and provide evidence where activities are verifiable. ICAEW provides digital tools, including an online CPD recording tool accessible via a member's dashboard.
Firms do not need to send CPD records to ICAEW unless requested by QAD. These records must be kept for three years after the end of the CPD year.
Shaw notes that the records should reflect all CPD activities, not just verifiable ones, as the total minimum hours will be reviewed. Firms can use various systems to record CPD, from spreadsheets to learning management systems (LMS), as long as the records are complete and available when required.
Monitoring Process
QAD will begin monitoring firms from 1 November 2024, focusing on a risk-based cycle. If a firm is not selected in the first year, it may be monitored in a future cycle. Shaw clarifies that firms do not need to align their CPD year with ICAEW’s. If a firm’s CPD year ends on 31 December, for example, QAD will review the latest completed year during monitoring visits.
Monitoring visits will be similar to practice assurance visits. QAD will review a firm’s CPD system, check compliance with the regulations, and assess how well firms are recording and monitoring CPD.
Reviewers will select a sample of ICAEW members within a firm and test-check their records. If any non-compliance is found, the firm will be asked to create an action plan to address the issues, followed by a follow-up review.
Seeking Support
The CPD Regulations are in place to ensure that members maintain the necessary skills and knowledge to meet professional standards. Shaw advises firms and individuals to make use of ICAEW’s online resources, including specific advice for sole practitioners, and to call the Technical Advisory Services helpline if they have any questions.
Monitoring visits will provide valuable feedback, helping firms improve their processes. ICAEW will share insights from the first monitoring year, highlighting areas of good practice and common issues observed.
The contents of this article are meant as a guide only and are not a substitute for professional advice. The author/s accept no responsibility for any action taken, or refrained from, as a result of the material contained in this document. Specific advice should be obtained before acting or refraining from acting, in connection with the matters dealt with in this article. The information at the time of publishing was accurate and could be subject to final changes.
