One of the thorniest issues that keeps people on their toes in the professional world is how much training they are required to do by regulators and professional associations to maintain registrations or memberships.
The reason this is such a controversy is that training takes time, costs money and draws people away from their very tasks that earn them money.
There is a flip side to all of this, of course, that relates to the fact that if you are unaware of new changes in rules, changes in technologies or even changes in a sector in which you profess to be an expert then they very thing you do to make money is at risk.
Another factor to be considered in this situation is that the better the training a professional undertakes, the better the service an organisation or client gets from that person. It should be considered win-win but there are times when professionals baulk at the attempt by regulators and others to increase mandatory professional development hours.
One of the interesting elements referred to in a recently released transparency report into PricewaterhouseCoopers’ audit and assurance practice is the amount of training done by partners and staff. Use as the benchmark the 40 hour a year CPE requirement that exists for members of the professional accounting bodies and you begin to see what happens if a major firm exceeds that minimum annual training requirement.
Partners and staff participated in 61 hours of continuing professional development in 2019, with that average hitting 68 hours during the most recent financial year.
This partly underscores the reality of what people need to be doing to stay up to date in an environment that is changing in various ways. The ability of people to provide audit and assurance services in today’s environment requires constant training because many factors impact the work of the auditor.
Consider any change in the economy that places financial distress on an individual client or an entire industry of which a client may be a part. Training in how best to deal with clients under that kind of stress and anticipating the sorts of behaviours that emerge in that scenario is critical as much as understanding the changes and nuances emerging in both auditing and assurance standards and, of course, the accounting standards.
Think about the rapid nature of changes in technology and the evolution of digital currencies as a method of exchange in some circles. How much will auditors and their engagement teams need to understand in order to deal appropriately with digital currencies? These shifts in the way the world does business mean that greater training is inevitably required.
Some of these new-fangled business practices can be incorporated into undergraduate and postgraduate qualifications, but the university system has a limited amount that it can cram into a three to four year degree. The reality is that much of that coursework will touch on key principles and only be able to introduce students to concepts relevant to the workplace.
There are certainly post-graduate qualifications that are provided by professional bodies designed to offer applied training or education catering for some business needs, but even those programs that are a perquisite for specific membership feature components that become less relevant to a professional as time passes by.
Serious questions need to be asked about how professional development is undertaken and evaluated because if there is anything the data from PricewaterhouseCoopers demonstrates it is that some of the mandatory professional development requirements may need revision.
It is probably timely to revisit what constitutes a reasonable number of mandatory professional development hours for people in the financial services space because the public interest is better served by ensuring people engaged in providing advice, doing audit or assurance engagements or offering taxation services are fully up to date.