Continuing professional development (CPD) is one of the statutory requirements for membership renewal. It is intended to develop and maintain necessary professional competence of Hong Kong Institute of CPAs members to perform their roles as CPAs throughout their career and thereby strengthen public confidence and trust in the profession.
The Institute conducts CPD compliance audit every year by audit sampling. Theoretically, every member is subject to the audit and members may be selected for audit on a risk-based process. This year, the timing of the CPD compliance audit has been moved forward to closely follow the CPD declaration for membership renewal. The selected members who are responsible persons of public interest entity auditors are required to respond by January 2023. The CPD compliance audit for the general membership will also commence in the first quarter of 2023. This article aims to refresh your understanding of CPD requirements and help you pass the audit with flying colours.
According to Statement 1.500 Continuing Professional Development of the Members’ Handbook, all members are required to:
- Complete at least 120 hours of relevant professional development activity in each rolling three-year period, of which 60 hours shall be verifiable;
- Complete at least 20 CPD hours of relevant professional development activity in each year;
- Measure learning activities to meet the above requirements; and
- Maintain appropriate records of all CPD activities completed in each rolling three-year period.
What is a rolling three-year period?
The Institute adopts a rolling three-year reporting cycle, which allows more flexibility for members to earn their CPD hours. CPD reporting cycles commence on 1 December each year. For example, if a member joined the Institute in year 2019, his/her first rolling three-year period would be from 1 December 2019 to 30 November 2022, and the second cycle would be from 1 December 2020 to 30 November 2023 and so on.
What are relevant CPD activities?
The cardinal principle of considering “what are relevant CPD activities” is whether such activities are closely aligned with the responsibilities of a member’s role and help to develop and maintain the professional competence necessary to perform that role. These learning activities should develop and maintain members’ professional competence necessary to perform their roles as CPAs.
CPD includes learning and development activities that are relevant to the roles of members, such as (a) education; (b) training; (c) practical experience; (d) mentoring and coaching; (e) networking; (f) observation, feedback, and reflective activities; and (g) self-development activities.
Such learning activities should maintain, deepen and extend their professional knowledge, skills and values, and should be relevant to the individual member’s work, professional responsibilities, helping them to enhance their understanding of the economic 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 as relevant CPD activities. In selecting the relevant CPD activities, there is no limitation on the service provider and no territorial boundaries.
However, if you are applying your existing professional knowledge and skills, such as performing daily job duties, you should not recognize these activities as relevant CPD activities because there is no learning involved.
Verifiable vs. non-verifiable CPD activities?
Verifiable CPD activities can be objectively verified by a competent source, which can demonstrate that the specified number of hours of learning and development activity has been undertaken.
The following examples represent verifiable evidence that could be used to demonstrate that the specified number of hours of learning and development activity has been undertaken:
- Course outlines, teaching materials, storyboards;
- Confirmation by a provider, instructor, employer, mentor, or tutor that a learning and development activity has been completed;
- Transcript, examination result slips;
- Independent assessments that a learning activity has occurred;
- Confirmation by organizers of participation in activities where learning outcomes have been achieved;
- Confirmation by an employer of participation in an in-house programme;
- Confirmation by organizers of seminar/talks in which one was engaged as a speaker; and
- Publication of a professional article or of the results of a research project.
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.
How long do I need to maintain the records and documentary evidence to support my attendance and completion of CPD activities?
Records and documentary evidence should be maintained to support members’ attendance or completion of CPD activities for a minimum of five years. You should be able to produce such records and documentary evidence if you are selected for an audit conducted by the Institute.
The Institute has adopted a more stringent approach in the CPD compliance audit since 2022, in line with increased regulatory expectations. Members selected for the audit will be required to provide (i) supporting documents for all of their verifiable CPD activities and (ii) a statement on the relevancy of the CPD activities. You may find a sample of a CPD record form on the Institute’s website.
Test your knowledge
Now that you’re better acquainted with the CPD requirements, can you find the issues in the following cases?
Case 1: Member A recorded 40 hours for the preparation of financial statements for the company that he worked for, and 20 hours for his presentation in the monthly departmental meetings as CPD activities.
Answer: These activities cannot be counted as CPD activities, whether verifiable or non-verifiable, because carrying out daily duties is applying existing professional knowledge and skills in the workplace. It is not aimed at developing and maintaining the professional competence of a CPA.
Case 2: Member B spent 15 minutes every day reading a financial newspaper. He recorded 80 hours of reading financial newspapers as a non-verifiable CPD activity.
Answer: Reading financial newspapers can be counted as a non-verifiable CPD activity. However, the maximum CPD hours that can be claimed for reading financial newspapers are five hours per year. You may find the summary of CPD activities with capped CPD hours under the FAQs on CPD requirements on the Institute’s website.
Case 3: Member C kept registration emails as supporting documents for his verifiable CPD activities.
Answer: Registration emails can only show that the member had signed up for the CPD activities but cannot demonstrate that a specified number of hours of learning and development activity has been undertaken. Certificate of completion or confirmation of attendance would be an acceptable supporting document in the scenario.
Case 4: Member D attended yoga classes and talks relating to the use of Chinese medicine to keep good health, and recorded 40 hours as CPD activities.
Answer: These events do not relate to the enhancement of members’ skills as a professional accountant. The Institute does not grant CPD hours for attending these events.
CPD is important for Institute members as CPAs to maintain and enhance their professional competence. It is also crucial to the society at large that CPAs have the technical knowledge and professional skills required to perform their roles. We hope this article refreshes your understanding of the CPD requirements. We look forward seeing you at the Institute’s professional development courses. Happy learning!
This article is contributed by the Membership and Admission Department of the Institute.
