by Cornelis Reiman
All professional accountants have an obligation to pursue continuing professional development (CPD). This is quite understandable given the rapid pace of change in all aspects of the private and public sector in which accountants are employed. Nothing stands still. In effect, university education and professional training must be updated if accountants are to be professional in all that they do.
As a consequence, accountants must understand the environment in which they work, as well as all factors that can affect it. The more that this knowledge is sought and absorbed, the more likely will it be that this improved awareness shall have a positive impact upon financial reporting and business decision making.
Consider, for instance, that accountants should strive to add value to their work. That is to say, accountants should be seen as partners to business leaders and other executives with whom they work or to whom they report. This can only be possible if accountants are at the forefront of their profession. It is for this reason that CPD is a mandatory element when any professional accounting organization seeks membership of the International Federation of Accountants (IFAC).
Ideally, CPD must improve accounting practice, thus, making accountants more effective in all that they do. It is not just about recoding the time taken to attend pertinent classes, undertaking reading, research or writing articles, or participating in professional activities otherwise. As the name suggests, it is about professional development, something that must be continual if it is to be of use in keeping your skills current at all times. Therefore, you cannot ignore the obligation to your professional status, career aspirations and employer.
Of course, your own work often provides you with additional information that is relevant to what you do. But, as suggested earlier, there are vast changes on a broader front that can affect aspects of your work. These can even affect the viability (positively or negatively) of your employer, or the industry in which you operate. It would, for instance, be remiss of accountants not to remain aware of proposed legislation, reporting standards and economic trends that are associated with their role and responsibilities.
While professional accounting organizations provide suggestions, parameters and processes for pursuing and recording CPD, you should give some thought as to what you ought to do in improving your personal, professional and technical skills. In effect, it is all about maintaining and improving your competence and competencies.
Naturally, this is sure to vary for different accountants. Some might need to keep abreast of IFRS, or US GAAP, perhaps Excel macro fundamentals, due diligence testing, financial budgeting, cash flow forecasting, taxation issues, writing and presentation skills, or corporate reporting in a climate where there is an increasing call for social responsibility. For example, it is not for accounting organizations to dictate exactly what CPD should be for all members.
Nevertheless, accounting organizations do stipulate what CPD entails in terms of the time commitment, as is in line with IFAC membership requirements. Particularly, IFAC members fully comply with the CPD Standard (IES 7), the purpose and scope of which is as follows:
1. This Standard (IES) proscribes that member bodies:
(a) Foster a commitment to lifelong learning among professional accountants;
(b) Facilitate access to continuing professional development opportunities and resources for their members;
(c) Establish for members benchmarks for developing and maintaining the professional competence necessary to protect the public interest; and (d) Monitor and enforce the continuing development and maintenance of professional competence of professional accountants.
2. This IES is based on the principle that it is the responsibility of the individual professional accountant to develop and maintain professional competence necessary to provide high quality services to clients, employers and other stakeholders.
In fact, IFAC members (such as CPA Australia, ACCA, and CGA) have adopted the IFAC CPD standards whereby members of these organizations are required to report CPD activities to their particular organization. This can be on an annual or triennial basis, and can be compulsory, or in line with a request following an audit.
In the case of CPA Australia, for example, its members must complete 120 CPD hours each triennium. Also, they must do at least 20 hours of CPD each year and might be required to submit records and a diary of their CPD activities. It is noteworthy that CPD hours cannot be carried forward. This means that each triennium will start afresh so that a minimum of 20 hours of CPD is required per year, with this accumulating to 120 hours of CPD in each triennium. In comparison, ACCA seeks a yearly declaration of CPD activity.
It must be said that CPD is a vital and integral part of being a professional accountant. For instance, without adequate proof of CPD, an accountant can lose their hard-earned professional standing and be removed from the associated register of members. Obviously, this is a significant incentive for accountants to maintain their knowledge and skills.
It is, however, very necessary for you to determine what you must do to broaden your understanding of critical aspects that have a direct impact upon you, your work and your employer. That fact is worth pondering. Then, you must plan, and do CPD. Additionally, along the way, remember to record what you do so that you can report your CPD efforts in whatever manner is asked of you. This, of course, is an integral part of being a professional accountant.
Cornelis Reiman, Ph.D., FCPA (Australia), FCPA (Singapore), Chartered Accountant and Chartered Secretary, applies international start-up, turnaround and business development skills as a Board-level advisor. He is also Independent Director on the Board of the Chamber of Professional Accountants of the Republic of Kazakhstan.