Proposed Consequences for Non-Compliance with CPE Hours by ICAI
Check the new Continuing Professional Education (CPE) guidelines by ICAI, effective from 2024. Learn about the four-level compliance framework and how CAs can stay informed.
Mridula Sharma23 Dec, 2023
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The Continuing Professional Education (CPE) Committee at the Institute of Chartered Accountants of India (ICAI) has introduced new rules for those who don't meet the required hours for General Professional Education (GPE). This post explores the Exposure Draft, which explains a four-level framework and the penalties for non-compliance. These rules will be in effect starting in the year 2024.
Exposure Draft By CPE Committee
The CPE Committee has released an Exposure Draft seeking feedback on proposed guidelines for consequential provisions. The aim is to keep Chartered Accountants updated on global changes, business complexities, and professional advancements by promoting continuous learning. The Exposure Draft underscores the significance of continuous professional education in today's ever-changing business environment. It references key clauses from the Statement on Continuing Professional Education, emphasizing the mandatory requirement of CPE credit hours for all members of ICAI.Understanding the Four Levels of Compliance Measures
This article outlines a comprehensive approach to handling non-compliance among members, focusing on four distinct levels of provisions. Let's delve into each level:Level I (Jan to June 2025): Extended Compliance Period
At this stage, members falling short of required CP hours by year-end get a 6-month extension until June 30 of the following year to catch up. To comply, members need to earn double the shortfall of CP hours, along with the regular annual requirement. Notification of the shortfall is sent via email.Level II (July to Dec 2025): Non-Compliance Status and Public Display
If a member doesn't catch up within Level I's extended period, their status is labeled as non-compliant on July 1. Details are publicly displayed on the CP Portal under the member's login until full compliance is achieved. To rectify this, members must obtain twice the CP hour shortfall for the relevant year, increasing accountability through public acknowledgment.Level III (Jan to June 2026): Disclosure and Additional Time for Compliance
Persistent non-compliance triggers additional measures on January 1 of the following year. Members with a Certificate of Practice (COP) must disclose their non-compliance status in the Multipurpose Empanelment Form (MEF). The list of non-compliant members is shared with the Professional Development Committee. Members are granted an extra 6 months (Jan 1 to June 30) to fulfill the CP hour requirement.Level IV (July to Dec 2026): Consequences for Persistent Non-Compliance
For those persistently non-compliant after Level III (1.5 years of extended compliance), consequences escalate. Members in practice receive a provisional Peer Review Certificate, finalized only upon meeting CP hour requirements. An extra 6-month period (July 1 to Dec 31) is given. If non-compliance continues, the matter may be referred to the Disciplinary Directorate for necessary action, following the Chartered Accountants Act, 1949. Good Standing Certificate issuance is deferred until CPE guidelines are met at all levels. These levels create a structured framework, allowing members to rectify non-compliance while highlighting the importance of ongoing professional development. Persistent non-compliance may lead to severe consequences, emphasizing the commitment of the ICAI to uphold professional standards. As these provisions are implemented, Chartered Accountants should stay informed and actively participate in shaping and ensuring effective guideline implementation.Consequences for Non-Compliance with CPE Hours FAQs
When do the new CPE guidelines go into effect?
The new guidelines for Continuing Professional Education (CPE) introduced by the Institute of Chartered Accountants of India (ICAI) will be in effect starting in the year 2024.
What is the Exposure Draft by the CPE Committee?
The Exposure Draft released by the CPE Committee seeks feedback on proposed guidelines for consequential provisions. It aims to keep Chartered Accountants updated on global changes, business complexities, and professional advancements through continuous learning.
How are non-compliance levels structured in the four-level framework?
The four levels of compliance measures include Level I (Extended Compliance Period), Level II (Non-Compliance Status and Public Display), Level III (Disclosure and Additional Time for Compliance), and Level IV (Consequences for Persistent Non-Compliance).
What happens in Level I of the compliance framework?
In Level I (Jan to June 2025), members falling short of required CP hours are granted a 6-month extension until June 30 of the following year to catch up. To comply, members need to earn double the shortfall of CP hours, along with the regular annual requirement.
How is non-compliance addressed in Level II?
In Level II (July to Dec 2025), if a member doesn't catch up within Level I's extended period, their non-compliant status is displayed publicly on the CP Portal under the member's login until full compliance is achieved. Members must obtain twice the CP hour shortfall for the relevant year to rectify non-compliance.
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