Why ICAI won't butt out of your development
Author:
Michael McDonnell
As the rules change for ICAI members working in business, Michael McDonnell poses the question you were afraid to ask!
THE STORY SO FAR
Once upon a time (1999 actually), the Institute of Chartered Accountants in Ireland (ICAI) was one of the first accountancy bodies to require its members to undertake Continuing Professional Development (CPD). Not much has changed since then in terms of the scheme or its requirements … until now.
From 1st January 2006, the rules for Chartered Accountants working in business will change - code for becoming more 'onerous' - and as a result many are thinking - although most have been afraid to ask - what exactly is the point of CPD ... and why is the ICAI taking so much interest in their development.
'Come on you guys in ICAI, get a life!' I hear you say, 'I've got far more important things to attend to, and spend money on, than CPD'.
So let's consider the changes further, and perhaps more importantly, let's discuss the purpose and value of CPD itself. It's time for a 'meaning of life' moment.
But first a word of warning - the next couple of paragraphs are a bit on the heavy side, in terms of references to regulations, international standards, and so on.
Hang on in there! After the 'dry' - but necessary - stuff, I will get into the more interesting bit on the purpose of CPD, the contribution by accountants to rocket science, etc.
IMPETUS FOR CHANGE
As mentioned in the introduction, whilst the CPD regulations for all members have remained consistent since their introduction, a change in the scheme is upon us.
More specifically, the Council of the ICAI has accepted the recommendations of International Education Standard (IES) for Professional Accountants #7, issued by the International Federation of Accountants (IFAC). IFAC is a representative body made up of 163 member organisations worldwide, including the major Chartered Institutes.
IES#7 is one of a series of standards intended to establish a common foundation for pre- and post-qualification education and training for accountants … and that's enough acronyms for a lifetime!
The ICAI decision to align its CPD requirements with IES#7 is therefore consistent with the other major professional accountancy bodies worldwide, and reflects our commitment to meeting the highest professional standards worldwide.
WHO IS AFFECTED BY THESE CHANGES?
The changes to CPD will predominantly affect Chartered Accountants working in business (that is, those employed outside practising offices). However, it should also be noted that Chartered Accountants who are on a career break, or who still use their membership in retirement, may also now need to adhere to minimum CPD requirements. The rationale here is that if others currently, or in the future are likely to rely on your CA competencies, then you should seek to maintain those competencies. The good news for these membership categories is that the majority of CPD events offered by the ICAI are free of charge to retired members or those on career breaks. If you are not sure, just ask us.
The CPD regulations for Chartered Accountants working in Practice (whether as partners or as employees of practising firms) remain unchanged … but if you fall into this category, do please read on as I think the exposition of CPD is relevant.
CURRENT CPD REQUIREMENTS FOR ICAI MEMBERS IN BUSINESS
Chartered Accountants in business who work in an 'accounting/finance/ auditing role' are currently required to complete 30 hours of CPD per annum, of which a minimum of 20 hours must consist of relevant, 'structured' CPD. 'Structured' CPD broadly consists of attendance at, or preparation for courses and conferences, online learning, etc. Again, if you're not sure, check the ICAI website at www.icai.ie
Other Chartered Accountants in business are currently expected to complete 30 hours of CPD per annum, which can be either 'structured' or 'unstructured'. 'Unstructured' CPD broadly consists of home study, networking, reading, etc.
NEW REQUIREMENTS
Chartered Accountants in Business - whatever their role - will now be expected to complete an average of 40 hours CPD per annum, of which a minimum of 20 hours must consist of relevant, 'structured' CPD. The new regime will therefore require an increase (from 30 to 40 hours) in total average annual CPD hours for all members in business, and an increase in minimum 'structured' hours (from zero to 20 hours per annum) for those Chartered Accountants in business who do not act in an 'accounting / finance / auditing' role.
As noted at the outset of this article, the changes came into effect from 1st January 2006. The new requirements are not retrospective, and will only apply to CPD from this date going forward.
Chartered Accountants- whether working in business or in practice - should take responsibility for recording their own CPD activity.
The ICAI monitoring regulations require members to maintain adequate details of their CPD activity for the last five years.
Up to now, a proportion of Chartered Accountants in practice have been selected annually for inspection of their CPD records. This process will now extend to include those working in business as well.
Wait a minute! Don't stop reading. It's just about to get interesting!
Phew, that's the end of the 'dry' stuff. So let's consider the more interesting and perhaps pertinent question of why bother with CPD. Oh, and by the way, the reference to rocket science earlier was a cunning ploy to get you to read on - I'm no rocket scientist.
So, CPD … help or hindrance? Discuss. Well, as you might expect, I'm going to come down on the 'help' side of the debate, and I'd like to offer 3 arguments in favour of the Institute's preoccupation with your development. I shall characterise these arguments as 'Your business', 'Your brand', and 'Your choice'.
CPD - IT'S YOURS BUSINESS
Firstly, let's think about the impact of CPD for you. Well, it's my expectation that the majority of Chartered Accountants in business are actively engaged in development activities to the extent, and of the nature now recommended. The changes are therefore more likely to impact in relation to the recording of CPD activity, rather than actual completion of the recommended minimum hours. You're engaged in development activity anyway, and we're just encouraging you to think about it further, and to record it.
And why are you engaged in professional development? Well, because you recognise how important skill and knowledge development is to your current role, to your career prospects and to your general well-being. Professional development is an investment in your future.
CPD - IT'S YOUR BRAND
ICAI does tend to harp on about brand an awful lot, but in my view, this is a worthwhile preoccupation. I believe that if the Chartered Accountant brand is to have any meaning then it needs to say something about the values of the profession, and the imperatives of the ICAI.
The Chartered Accountant brand should stand for the highest professional standards, for a commitment to enhancing business performance, and for quality and excellence of service delivery … and the only way that we can truly defend the brand is if we commit to CPD.
But the payback is phenomenal. Demonstrating that the brand has real meaning by investing in your professional development, reinforces the competitive advantage of the CA qualification … thereby increasing your personal marketability and through this, your earnings potential.
CPD - ULTIMATELY, IT'S YOUR CHOICE
Ultimately, the decision about what CPD you should commit to, and where the activity is undertaken is entirely up to you. If the purpose of CPD is to maintain, deepen and extend your professional competence, then the nature of your development should be relevant to your own specific needs. You are the best judge of which of your skills and competencies require development, in the context of your current and potential future roles. There is no 'one size fits all' mindset.
To demonstrate this point further, consider Figure 1. This reflects an ICAI view of the kind of competencies that might be expected of a 'typical' qualified Chartered Accountant. It is not a prescription, but rather a 'prompt' about the range of skills and knowledge that a 'typical' Chartered Accountant might possess.
And before you get hung up on the dangers of the term 'typical', focus more on the underlying message - a Chartered Accountant should possess more than the 'traditional' technical or functional skills, and increasingly this encompasses a range of competencies dealing with 'organisational effectiveness', 'broad business', 'professional values', etc.
The important point about CPD is that you are thinking about which of your competencies require development AND that you are actually making an investment of time and resources in that development.
Only in this way, can the terms 'Chartered Accountant' and 'professional' have real value and meaning.
A BIT OF A CHANGE, BUT A LOT STAYS THE SAME
So, the ICAI has recognised the importance of CPD for its members for many years. But some things are changing. The rules for Chartered Accountants in business for a start.
The creation, by the ICAI, of a new Lifelong Learning team in recent months represents a far more significant addition to the ICAI member services environment.
You should have already noticed a bigger and better CPD programme for 2006, the launch of a new Masters Programme in Corporate Leadership, plus the creation of eCPD for your online learning. (If you are not an ICAI member you can get a copy of the programme by sending an email to cpd@icai.ie).
Keep an eye on the new CPD: Lifelong Learning Newsletter for news of upcoming CPD events and new initiatives as they roll-out.
The intention is clear - ICAI believes that CPD is about adding value for its members, and this demands value-added CPD. A change in rules for Chartered Accountants in business doesn't alter the fundamental purpose of CPD, and shouldn't confuse the underlying message - your development matters to you, and therefore it has to matter to us.