Hello, my name is, Liaqat Mir and I'm one of the technical consultant at Mercia. Here I am with another exciting podcast. So we will be looking into an interesting topic for the ICAEW members, and this is the changing CPD requirements. If you remember over a year ago, ICAEW. Announced that changes to CPD were on the horizon.

These changes have now been finalized and will be effective from 1st of November, 2023. Now, let me make it clear at the beginning that when ICAEW first announced the new policy last year, it stated that the overarching principles of the existing CPD policy will remain. Which means that member will still have to take the ICAEW recommended approach to plan their CPD, which is reflect, act, impact, and declare that they have complied with the new CPD policy, ensuring they have evidence if this is requested.

Now, before we look into the new requirements, a quick reminder on existing ICAEW approach to CPD. When we say reflect means considering your development needs and how you can meet them and create a plan of action. Act means attending different sort of activities. For example, technical reading, attending conferences, et cetera.

Impact means is evaluating the effectiveness of what you have done. Are you satisfied that your actions have enabled you to meet your objectives? Or do you need more work in, for example, any related area? Declare, which means every year members are asked to provide evidence of their compliance. ICAEW recommends keeping an online record of your CPD during the year so that you can submit this easily when it is required to do so.

So now, The first logical question would be that why ICAEW is making these changes. Well, I would say two main reasons. Firstly, the audit and accountancy profession is under great scrutiny. If you look back three to four years, how many big corporate collapses have happened and how many inquiries have been carried out into the profession?

Our profession is in spotlight. The aim here is that these changes will give greater clarity on the amount of CPD that you should be doing to ensure that you have up to date professional, technical, and business skills. The next question would be who will be affected? Now, obviously if you are an ICAEW member, or if you have regulated by ICAEW for certain activities, for example, audit, CPD probate, then you must comply with the CPD regulations if you undertake accountancy or finance work or reserved or non reserve legal services.

What about if you are a company director, a trustee, or hold any role with an equivalent level or legal or financial responsibility? In that case, yes. You will also be subject to the CD CPD regulations. What about if the ICAEW member firms and firms granted a dispensation to use the description?

Chartered accountants? Yes. You are also within the scope of the CPD regulations, but there are three main changes to the CPD regulations. Firstly, identification of CPD category, introduction of a minimum number of CPD hours. Both verifiable and non-verifiable, an introduction of mandatory ethics training.

Now I will look into each of these three main changes. So starting with identification of CPD category, now the individuals will be required to identify which CPD category they fall into, which of course will be based on the work they do. Three categories of CPD for practice and non-practice members have been introduced.

These are category one, category two, and category three. Depending on the risk of the work the individuals undertake and the levels of their seniority, category one requires the most. CPD and category three requires the least on the scale. Most people, whether in practice or not, will fall into CPD category three, as this is the default.

However, you may be moved into the higher category. Based on the nature of your role, you are into as part the chief officer of ICAEW's Professional Standards Department. The driving factor for the CPD categories has been the degree of risk to the public in services. Or work that is being undertaken.

So for example, if you are doing something that is very complex, but it is not going to have a big impact on the public, then it is unlikely to feature in CP D categories one and two. The regulations have a full list of CPD categories, but what they have also designed is the Ccpd self-assessment tool, which will help you understand how you are.

Affected by ICAEW changing CPD requirements and work out how much CPD you'll need to fulfill each year. Another question, what if I am in multiple roles? Why? In that case, if you hold multiple roles, you need to complete the assessment for each one. And more importantly, if these roles have different obligations, you will need to meet the higher requirements for CPD hours.

Now let's look into the second main change, which is the introduction of a minimum number of CPD hours for both verifiable and non-verifiable activities. Each CPD category has a corresponding minimum number of hours of CPD that must be undertaker. A proportion of which must be verifiable. So if you look into, for example, someone is working in practice C category one, minimum number of hours, 40 and minimum number of verifiable hours are 30, whereas the category two in practice, minimum number of hours, 30 and minimum number of verifiable hours, 20.

If you look into category three, which is the default one, which is the least one on the scale in practice, minimum hours, 20 and 50% of that has to be the number of verifiable hours which means 10 hours. And if we move into the working outside the practice in the industry, for example, then the minimum numbers of hours are exactly the same for these three categories.

For example, category one 40, category two 30, and category three 20. Whereas the verifiable hours have been reduced for the people who are working outside practice to 50% of the verifiable hours in the three categories. If someone is working in practice, so for example, if you are in category three, In the outside the practice, you only need five outta 20 verifiable hours.

For executives, trustees, charities, working pro bono, i c a, WCP D course for charity trustees or training with the similar learning outcomes. The next interesting question is what is verifiable CPD? Remember, there are two things which you need to look into. Minimum number of hours for each category, and then each category out of those, minimum number of hours, minimum number of verifiable hours.

So it is absolutely crucial that we understand what is verifiable CPD. Well, for a CPD activity to be verifiable, there must be evidence of its completion. That is number one objective. Fact based rather than based on personal perspectives, which means what is relevant to you, which means the CPD activity should meet a specific learning outcome that you have identified as necessary to remain up to date and competent in your professional role.

You can also be able to corroborate it. I e you can con, can be confirmed to be accurate. Okay. And you must be able to retain it by a documented and stored in observable format. So to demonstrate the CPD you have undertaken, you should keep a record of your CPD activity, along with the supporting evidence for the verifiable CPD.

Now, ICAEW at present is developing an online tool. To help you record your CPD activities, which you may choose to may choose to use. Let me make it clear that verifiable CPD is not limited to structured courses, which means you can obtain verifiable CPD, for example, from attending the courses.

Okay. Attending the team discussions. Okay. Or consulting with the experts. So the only, when, when you say you can also obtain verifiable CPD by technical reading, but only verifiable if the reading can be evidence. Otherwise, that would count as non-verifiable CPD if it is relevant to the learning needs of your role.

What about listening to the podcast? Well, not verifiable, but it will be counted as in non-verifiable CPD if it is relevant to the learning needs of your role. So if you are listening to this podcast, that is not verifiable part. This is relevant for you. Then it'll be counted as a non verifiable CPD.

Now, the third main change is the introduction of mandatory ethics training. The new regulations require members to allocate at least one hour of verifiable CPD to ethics training aligned to the ICAEW Board of Ethics every single year. I understand that the ICAEW has planned to launch free ethics CPD later in the year.

And at mercia we also offer tailored ethics training for your firm, which can be delivered either remotely or in person. So if you. Need ethics training. Please do not hesitate to contact us via our website. Hope you find this podcast useful, and I hope to be back with another exciting topic soon. Bye for now.

Thank you for listening to the Mercia Podcast. For more information on the topic, please visit mercia-group.com