Frequently Asked Questions on Continuing Professional Development Requirements Q. What is continuing professional development? Continuing professional development (CPD) is intended to maintain, enhance and broaden members relevant knowledge and skills to enable them to carry out their professional duties and responsibilities competently as Certified Public Accountants (CPA) throughout their career. The cardinal principle of considering what are relevant CPD activities is whether such activities are relevant to an individual's work as a CPA. These learning activities should enhance and broaden the relevant knowledge and skills to enable a CPA to carry out his or her professional duties and responsibilities competently. Individual training needs vary and the CPD scheme has been designed to reflect this by offering a wide spectrum of training activities which qualify for CPD hours. To meet the CPD requirements, members are free to choose activities relevant to their individual needs. Members may choose programmes offered by the Institute or other outside providers, so long as they consider such programmes suitable and relevant to their individual needs. Having taken into consideration that many of our members are busy practitioners and frequent travellers, compliance with CPD requirements can be achieved by methods of learning other than classroom lecture-based methods. Examples are e-learning; attending overseas accounting conferences/training; long distance learning courses and reading of professional journals and books. Selection of CPD programmes should not be confined to those organized by the Institute as other relevant programmes/courses organized by outside providers are also recongised as CPD activities. The main consideration is whether such activity fulfils the cardinal principle as set out above. Q2. What is the consequence for not complying with the CPD requirement? With the enactment of the Professional Accountants (Amendment) Ordinance (PAO) in September 2004, compliance with CPD is one of the criteria for renewal of registration as a CPA under s.28(2)(c) and issuance of a Practising Certificate under s.(8) of the PAO. In the absence of exemption, the Council shall refuse a member's application to renew his/her registration as a CPA if the member fails to comply with the CPD requirements as set down by the Council. Q3. I have not submitted my CPD laration to the Hong Kong Institute of CPAs by the specified deadline, will I be regarded as a case of non-compliance? Yes, if you do not file your CPD laration to the Institute by the specified due date, you will be regarded as being not compliant with the CPD requirements. As a consequence, your application for renewal of registration as a Certified Public Accountant will not be granted.
Q4. I am also a member of another professional accountancy institute. Do I have to comply with the CPD requirements of the Hong Kong Institute of CPAs? The CPD compliance requirements of the eight institutes of the Global Accounting Alliance (of which the Hong Kong Institute of CPAs (HKICPA) is also a member) listed below are now recognised by the Institute except for HKICPA Practising Certificate (PC) holders. This means that, except for HKICPA PC holders, members of HKICPA who are also members of one or more GAA Institutes need only fulfil the CPD requirements of one of those GAA Institutes (of which the HKICPA member is also a member) and, in so doing, shall be deemed to satisfy HKICPA s CPD requirements. The other eight GAA Institutes are:. American Institute of Certified Public Accountants (AICPA) 2. Chartered Accountants Institute of Canada (CICA) 3. Institute of Chartered Accountants in Australia (ICAA) 4. Institute of Chartered Accountants in England and Wales (ICAEW) 5. Institute of Chartered Accountants in Ireland (ICAI) 6. Institute of Chartered Accountants of Scotland (ICAS) 7. New Zealand Institute of Chartered Accountants (NZICA) (members of the College of Chartered Accountants) 8. The South African Institute of Chartered Accountants (SAICA). As an example, a member of HKICPA who is also a member of the ICAEW, but is not a PC holder of HKICPA, may choose to meet the CPD requirements of either HKICPA or ICAEW: if that member chooses to meet the CPD requirements of the ICAEW then he or she will be deemed to meet the HKICPA CPD requirements. Such members are expected to choose which institute s CPD requirements to comply with for a full CPD reporting year, i.e. ember to ember of the following year. The first CPD reporting period for which this is effective is the year to ember 2008. For practical purposes, in order to introduce these new arrangements, the Institute will accept declarations of CPD compliance which cover the three years to ember 2008 where a member has complied with another GAA Institute s CPD requirements for that period. This applies even where the member has previously made declarations of compliance to the HKICPA s CPD system for the two years ended ember 2007. Members satisfying HKICPA s CPD requirements by satisfying another GAA Institute s CPD system are still required to complete the HKICPA annual declaration of CPD compliance. If selected for audit, such members will be required to produce their CPD records and relevant supporting documentary evidence to meet that GAA Institute s CPD system. HKICPA may seek relevant confirmation of CPD compliance with the relevant GAA Institute as appropriate. Q5. If I am a member of another professional accountancy institute and I am exempt from its CPD requirements, am I automatically exempted from the CPD requirements of the HKICPA? No. Exemptions from CPD compliance granted by other professional accountancy bodies, including members of the GAA (see Q4) are not recognized by the Institute. Exemption from compliance with the Institute s CPD requirements can only be granted by the Institute in accordance with the Institute s rules. Please apply for exemption directly to the Institute s Professional Development Department. 2
Q6. Under Statement.500, is there any difference between PC holders and non-pc holders in terms of CPD requirements? No. The same requirements are applicable across-the-board to all members, irrespective of whether or not the member is a PC holder. However, even if PC holders are members of GAA Institutes, they are still required to fulfil the HKICPA s CPD requirements. Q7. What is the reporting cycle for CPD compliance? The Institute adopts a rolling three-year reporting cycle, which commences on ember each year. For example, the first rolling three-year period is from ember 2005 to ember 2008, and the second cycle is from ember 2006 to ember 2009. Q8. What does a rolling three-year period mean? The rolling three-year cycle allows more flexibility for members to earn their CPD hours: a fixed total number of CPD hours (20) has to be completed every three years rather than every year. However, a minimum of 20 CPD hours (verifiable or non-verifiable) has to be achieved each year. Q9. What is the distinction between verifiable and non-verifiable CPD activities? Verifiable CPD activities can be objectively verified by a competent source. Examples include attendance records, certificates of achievement or examination result slips. Training handouts do not provide objective verification by a competent source. Non-verifiable CPD activities have no evidence to substantiate the CPD hours claimed. One example of a non verifiable activity is reading professional journals including A-Plus Magazine. Members may claim up to 5 hours per year for reading financial newspapers. Q0. I know the Statement has introduced the concept of CPD as verifiable learning activities. What are the differences between "structured" CPD as defined in the old Statement.500 (September 2004) and "verifiable" CPD as defined in the current Statement.500 (Revised October 2008)? The "verifiable" activities under the current Statement are, to some extent, quite similar to that of "structured" activities under the old Statement. A verifiable activity means that an activity can be objectively verified by a competent source, while structured activity is composed of either an interactive or an assessment component. For example, participation in a course or seminar can generally be considered as verifiable and structured CPD because it can be objectively verified by a competent source, like an attendance record or, in the case of the Institute s e-learning course, registration confirmation. At the same time, it is interactive and/or consists of an assessment component. In other words, a structured activity in most cases is also a verifiable CPD activity. An example to illustrate the difference between "verifiable" and "structured" CPD activity is an e-learning programme. An e-learning programme which does not have an assessment component, is unstructured CPD. It is however verifiable, because it can be verified by a "competent source" such as the confirmation of registration by the provider. 3
Q. I have been a member of the Institute since 999, please illustrate how I comply with the CPD requirement in a rolling three-year period. (i) The rolling three-year period is measured as below: Rolling three-year period st cycle (Note ) 2nd cycle 3rd cycle 2005 2006 2007 2008 2009 200 st CPD 2nd CPD st CPD 3rd CPD 2nd CPD st CPD 3rd CPD 2nd CPD 3rd CPD Note: () The first rolling three-year period begins on ember 2005 and ends on ember 2008, with a breakdown as below: First Rolling Three-year Period CPD Reporting * st CPD (2005/06).2.2005..2006 2 nd CPD (2006/07).2.2006.2007 3 rd CPD (2007/08).2.2007..2008 * A CPD Reporting (also referred to as CPD year) is a period of 2 months ending on ember each year. (ii) Illustrations of compliance and non-compliance with the current CPD requirement Example A Compliance CPD CPD Hour A B C D 2005/06 2006/7 2007/8 2008/9 Verifiable (VH) 0 20 40 80 Non-verifiable (Non-VH) 40 0 20 0 Total VH and Non-VH 40 60 90 Total/Cycle - - (A+B+C) 80 (B+C+D) VH/Cycle - - 60 40 This member has met the CPD requirement as he has completed: (a) a minimum of 20 CPD hours in each rolling three-year period as shown in the row "Total/Cycle"; and (b) a minimum of 60 verifiable CPD hours out of the 20 CPD hours in each rolling three-year period as shown in the row "VH/Cycle"; and 4
(c) a minimum of 20 CPD hours per year, either verifiable or non-verifiable, as shown in columns A to D. Example B Non-compliance CPD CPD Hour A B C D 2005/06 2006/7 2007/8 2008/9 Verifiable (VH) 0 40 0 5 Non-verifiable (non-vh) 5 40 25 0 Total VH and Non-VH 5 80 25 5 Total/Cycle - - 20 (A+B+C) 20 (B+C+D) VH/Cycle - - 50 55 Despite this member having completed a total 20 hours in each rolling three-year period, he has not complied with the CPD requirements for the following two reasons: (a) (b) Failure to meet a minimum of 20 CPD hours per year as shown in columns A and D, both are 5 hours only; and Failure to meet a minimum of 60 verifiable CPD hours out of the 20 CPD hours in each rolling three-year period, as shown in row VH/cycle. Q2. If I join the Hong Kong Institute of CPAs as a member in the middle of a CPD year, how many CPD hours do I have to complete during that year? Where a member joins the Institute during a CPD year, the CPD requirement is on a pro-rata basis for that year (i.e. 20 minimum CPD hours on pro-rata basis). The rolling cycle starts on the subsequent ember. Q3. What are the criteria for CPD exemption? Statement.500 (Revised October 2008) describes the circumstances for CPD exemption (http://www.hkicpa.org.hk/membership/cpd/mandatory/doc/_500.pdf). Council considers exemption applications on a "case by case basis" with special circumstances such as career breaks, serious illness and retirement from employment. Members must apply in writing to the Institute for exemption, supported by documentary evidence. No exemption will be granted to members holding PCs or directors of listed companies. Exemptions of other Global Accounting Alliance (GAA) Institutes from CPD compliance are not recognized by the Institute. Exemption from compliance with the Institute s CPD requirements can only be granted by the Institute. Q4. If I satisfy the criteria for exemption from the CPD requirements, do I need to submit a CPD laration whenever I renew my registration as a CPA? To be exempt from the CPD requirements, a member must apply to the Institute for exemption. If you have been granted a CPD exemption in a previous year, you do not need to re-apply if your circumstances remain unchanged. Otherwise, you will need to notify the Institute. If a member s application for exemption has been approved by the Institute and there is no change in the circumstances of the member, the member is not required to submit a declaration of CPD compliance. 5
Q5. I am over 55 years of age and have been appointed as a non-executive director of a listed company on a part-time basis, can I be exempted from the CPD requirement? No. As stipulated in para. 35 of Statement.500 (Revised October 2008), any member who is a director of a listed company, regardless of whether this is full-time or not, does not qualify for CPD exemption. Accordingly you are required to comply with the CPD requirements as prescribed. Q6. What are relevant CPD activities? It is the responsibility of members to exercise their professional judgement in deciding the type of CPD activities they undertake according to their individual needs. Such learning activities should maintain, deepen and extend their professional knowledge, skills and values, and should be relevant to the individual member's current and future work, professional responsibilities, helping them to enhance their understanding of the trends and environment in which they are working as a CPA. Learning activities to improve business skills, such as leadership, negotiation, management and presentation skills can also be recognized relevant CPD activities. Q7. I have attended a number of courses run by organisations other than the Hong Kong Institute of CPAs. These courses are not endorsed by the Institute, can I claim CPD hours for these courses? There is no policy requiring outside course providers to obtain endorsement from the Institute for CPD recognition. You should exercise your own judgement whether such courses constitute continuing professional development. The main consideration is whether these courses contribute towards your professional development. In other words, they should be relevant to your immediate or long term needs as a CPA. Members are reminded to keep a record of these activities. If the organizer provides a bearer certificate or attendance record, members are reminded to fill in their names immediately after receiving the record to avoid transfer of CPD to another person in the event of its loss. Q8. I am studying a MBA programme. Can it be recognized as a CPD programme? If so, is it a verifiable or non-verifiable CPD activity? Studying a relevant academic course can be considered as a verifiable learning activity if it is able to be objectively verified by a competent source, such as an attendance record, or confirmation of registration from the provider. For an MBA programme, both face-to-face contact hours as well as revision hours can be counted as verifiable CPD hours. In-house training courses are also recognised as verifiable CPD activity provided you produce confirmation of participation by your employer. Q9. My job requires me to coach my staff on a daily basis. Can I claim CPD hours from coaching my staff? No. Normal work activities carried out as part of your daily work do not constitute continuing professional development, whether verifiable or non-verifiable. However, occasional technical training sessions or supervision of a registered student of the Hong Kong Institute of CPAs as an Authorised Supervisor (AS), an External Authorised Supervisor (EAS) or a Counsellor (C) of an Authorised Employer is recognised as CPD activity. 6
An AS/EAS/C is allowed to claim up to 5 verifiable CPD hours for supervising one registered student of the Institute per CPD year. Regardless of the number of students supervised, the member can only claim up to 20 hours per CPD year. For example, if a member supervises 5 students as an AS and 2 students as an EAS during any CPD year, he/she is still only allowed to claim a maximum of 20 verifiable CPD hours. Q20. I am currently working in the US and will not be in Hong Kong for the next few years. As such I shall not be able to attend any CPD activities in Hong Kong. Can I get any exemption from CPD requirement? Residing or working overseas does not qualify you for exemption from the CPD requirements. CPD learning activities are not restricted to location or classroom lecture-based method. For members who reside overseas, e-learning is an alternative CPD activity. Any suitable CPD activities taken outside Hong Kong are also recognized as constituting continuing professional development, provided that the knowledge and/or skills acquired through these activities are relevant to your professional development as a CPA. Q2. I participate in my company's in-house training sessions and occasionally I am involved as a speaker. Can this type of activity be counted as verifiable CPD activity? In principle, time spent by a member in assimilating knowledge on professional, technical and managerial subjects relevant to his/her work as a CPA is recognised as constituting continuing professional development. Therefore being a course speaker or presenter of topics relevant to your professional responsibilities is considered to be a CPD activity. Time spent in preparing the presentation of relevant topics is also counted as CPD hours. However, repeated presentations of the same material (especially within a short period of time) will not be counted as CPD activity unless the repeated work entails updating of the presentation material. In this case only the time spent on research and updating the material should be counted as CPD hours. Q22. I serve on a number of committees of the Hong Kong Institute of CPAs and other professional bodies. Some can be classified as technical committees, some cannot. Can this activity qualify for CPD hours? Yes, technical work for technical committee qualifies as CPD. The cardinal principle of considering what are relevant CPD activities is whether such activities are relevant to individual's work as a CPA. These learning activities should enhance and broaden the relevant knowledge and skills to enable a CPA to competently carry out his or her professional duties and responsibilities. Q23. I know that I need to maintain documentary evidence to support my attendance and completion of CPD activities. How long do I need to keep these records? Pursuant to Statement.500 (Revised October 2008) of Member's Handbook, members are required to maintain records and documentary evidence of their verifiable CPD hours for a minimum of five years. You will be asked to produce the records and documentary evidence if you are selected for the CPD audit. See the Institute s web site for a sample CPD record: http://www.hkicpa.org.hk/membership/cpd/mandatory/doc/cpd_records_form.doc 7
Q24. I know that an annual audit exercise is conducted after the annual CPD declaration. Who will be selected and how are they selected to undergo this audit exercise? Every year the Institute conducts a CPD audit on a certain percentage of the membership under the directive of Council. A random sample is generated by computer. Theoretically every member is subject to the CPD audit and members may be selected for audit on a risk-based process. Members selected for audit are required to submit to the Institute their CPD period of the relevant reporting CPD period with documentation to support attendance or completion of the CPD activities as stated in their CPD records. The current Statement.500, as revised in October 2008, will be used as the basis to audit the CPD records. Q25. Do I have to submit an individual CPD declaration of compliance to the Institute if my employer makes the declaration for me under a block declaration arrangement? No. If your employer has made the declaration on your behalf, you do not have to submit an individual declaration of CPD compliance to the Institute. However, if your CPD compliance declaration is not included in a block declaration by your employer, for whatever reason, then you are still required to submit a CPD declaration directly to the Institute. It is the duty of each member to ensure that either they are included in their employer s block declaration or they make their own individual declaration of CPD compliance. Q26. How can I apply for block declaration of CPD compliance? If you are the person responsible for CPD training in your member practice / organisation, you may apply to the Institute for further information. There are various criteria to be met, for example that your member practice / organization must have a system of keeping records which demonstrate that your staff have met the Institute's CPD requirements. If you are an individual member of staff, please contact your employer to enquire about CPD block declarations. If your employer does not make a block declaration which includes you, you are still required to make an individual declaration of CPD compliance directly to the Institute. If you have any further queries regarding CPD requirements, please call the Institute's Professional Development Department at 2287 7098 or 2287 7054. HKICPA Revised in October 2008 8