The Continuing Professional Education (CPE) Committee of the Institute of Chartered Accountants of India (ICAI) has recently proposed a set of consequential provisions for non-compliance with CPE hours requirements.
This article delves into the Exposure Draft outlining the four-level framework and the consequences for non-compliance, applicable from the calendar year 2024 onward.
Exposure Draft Overview:
The Exposure Draft, issued by the CPE Committee, calls for input and suggestions on the proposed guidelines for consequential provisions. The objective is to ensure that Chartered Accountants remain abreast of global changes, business complexities, and professional advancements through continuous learning.
The Exposure Draft emphasizes the importance of continuous professional education in the dynamic business landscape. It cites relevant clauses from the Statement on Continuing Professional Education, highlighting the mandatory nature of CPE credit hours for all ICAI members.
Proposed 4-Level Provisions:
The article breaks down the four levels of provisions for non-compliance, starting from the extended period for making up shortfalls to potential disciplinary actions. The levels include:
Level I (Jan to June 2025): Extended Period for Compliance
In this initial level, members who fail to complete the required CPE hours by the end of the calendar year are granted an extended period of 6 months, until June 30 of the following year, to make up for the shortfall. To achieve compliance, members must obtain twice the shortfall of CPE hours, in addition to the regular CPE hours required for the current calendar year. Notification of the shortfall is communicated to members via email.
Level II (July to Dec 2025): Non-Compliance Status and Public Display
If a member fails to make up for the shortfall within the extended period outlined in Level I, their status is classified as non-compliant on July 1. Details of non-compliance status are publicly displayed on the CPE Portal of the ICAI under the member’s login until full compliance is achieved. To rectify the non-compliance, the member must obtain twice the shortfall of CPE hours for the relevant year. This level intensifies the accountability of members by publicly highlighting non-compliance.
Level III (Jan to June 2026): Disclosure and Additional Time for Compliance
For members who persist in non-compliance, the CPE Committee may resort to further measures on January 1 of the following calendar year. In the case of members holding a Certificate of Practice (COP), they are required to disclose their non-compliance status in the Multipurpose Empanelment Form (MEF) of ICAI. The list of non-compliant members is provided to the Professional Development Committee of the ICAI. Members are given an additional 6 months (from January 1 to June 30) to complete the shortfall in their CPE hours by obtaining twice the required hours.
Level IV (July to Dec 2026): Consequences for Persistent Non-Compliance
If non-compliance persists after the Level III stage (1.5 years of extended compliance period), the consequences become more severe. For members in practice holding a Certificate of Practice (COP), a provisional Peer Review Certificate is issued. The final Peer Review Certificate is granted only upon compliance with the CPE hours requirement. The member is given an additional 6 months (from July 1 to December 31) to complete the shortfall. If non-compliance persists, the matter may be referred to the Disciplinary Directorate for necessary action, as per the provisions of the Chartered Accountants Act, 1949. Issuance of a Good Standing Certificate is deferred at all levels until compliance with the CPE guidelines is achieved.
These four levels form a structured and escalating framework, providing members with opportunities to rectify non-compliance while emphasizing the significance of ongoing professional development. Persistent non-compliance may result in serious consequences, reinforcing the commitment of the ICAI to uphold professional standards within its community of Chartered Accountants.
As the ICAI moves towards implementing these consequential provisions, Chartered Accountants must be vigilant in meeting CPE requirements.
By staying informed and actively participating in the feedback process, members can contribute to shaping these guidelines and ensuring their effective implementation.
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