Obtaining a practising certificate as a professional accountant: FAQs

If you are a member of the ACCA, ICAEW, ICAS, or IFA, you may be subject to requirements to obtain a practising certificate for carrying out certain activities. These requirements vary depending on your professional body. Understanding the relevant regulatory rules and procedures which govern when you need to obtain a practising certificate, and how to go about obtaining one, can be difficult to navigate. Yet the consequences of failing to have one when required to do so can have significant implications for your professional career.
 

We regularly advise professional accountants as to their requirement to obtain a practising certificate from the various regulatory bodies for accountants, including:

• The Association of Chartered, Certified Accountants (ACCA);
• The Institute of Chartered Accountants of England and Wales (ICAEW);
• The Institute of Chartered Accountants of Scotland (ICAS); and
• The Institute of Financial Accountants (IFA).

These Frequently Asked Questions aim to help you identify whether you need a practising certificate. If you find that you are in breach of any of these regulations, early remedial action and communication with your regulator is often critical to ensure that your position is best protected and to minimise any sanctions ultimately imposed.

When do I need a practising certificate?

You need a practising certificate to engage in ‘Practice’ (ICAS) or ‘public practice’ (ACCA, ICAEW and IFA).

The relevant provisions that apply to each of the respective professional bodies are:

• ACCA: Regulation 3(1)(a) of the Chartered Certified Accountants’ Global Practising Regulations 2003.
• ICAEW: Regulation 1 of the ICAEW Practising Certificate Regulations.  
• ICAS: Paragraph 3.1 of the ICAS Public Practice Regulations, which refers to the need to obtain a practice certificate when engaged in “Practice”.
• IFA: Paragraph 3.1 of the IFA Public Practice Regulations.

What is 'practice', or 'public practice'?

The ACCA, ICAEW, ICAS, and IFA each respectively adopt their own definition of ‘practice’, or ‘public practice’. They overlap considerably and can be summarised as follows:

ACCA

Regulation 4(1) of the Global Practising Regulations 2003 includes within its definition of ‘public practice’:

1. accepting an appointment as an auditor; and/or
2. signing or producing any accounts, report, certificate or tax return for third party use;
3. holding oneself/itself out, or allowing oneself to be held out, as available to undertake the above activities (as well as allowing or using such titles as Chartered Certified Accountant(s)”, “Certified Accountant(s)”, “Chartered Accountant(s)”, “Accountant(s)” or “Auditor(s)” or similar); and/or
4. holding oneself out, or allowing oneself to be held out, as a principal of a firm where public practice is carried on.

ICAEW

The ICAEW Statement on Members Engagement in Public Practice (effective 1 January 2025) confirms that an individual is engaged in public practice if they are a principal or are held out as a principal in a ‘public practitioner’, a parent entity of a ‘public practitioner’, or an entity which is a principal of a ‘public practitioner’.

A ‘public practitioner’ is an entity (including an individual in sole practice) which provides “accountancy or reserved services” for a fee. Accountancy or reserved services are:

1. any of the services listed in Annex 1 of the ICAEW’s Statement, which includes the provision of external audit and assurance services and the preparation of financial accounts;
2. any service that requires a specific licence that the ICAEW can provide, even if the licence is obtained elsewhere; or
3. any reserved legal services (other than those where you are a member of another qualifying membership body).

ICAS

The ICAS Public Practice Regulations states that its members shall be engaging in ‘Practice’ if they are:

1. providing accountancy or related services, to persons other than their employer, for a fee; or
2. are a Principal in a Firm providing accountancy or related services. 

A Principal is defined in the ICAS Rules as: “a sole practitioner or a partner or member or director of an entity.”

A Firm is defined as: “any entity that is subject to the Rules and Regulations and defined in Rule 2.2.2.” Rule 2.2.2 states that the ICAS Council “may make Regulations relating to the regulation by ICAS of… Firms”.

The ICAS accompanying guidance (“When is a practising certificate required?”) also sets out  a long non-definitive list of activities that fall within the definition of “accountancy or related services”.

IFA

The IFA Public Practice Regulations defines public practice activities as individuals who provide, or are held out to be able to provide accountancy services to the public, whether in the capacity of sole practitioner, a partner in a partnership, a member in a limited liability partnership, or a director of a body corporate. 

Appendices 1A and 1B to the IFA Public Practice Regulations provides guidance on the types of services that the IFA regards as accountancy services.

Why is my regulator concerned with public practice?

Offering services to the public carries with it a significant level of responsibility. There is a clear risk that if you are negligent or otherwise incompetent in the delivery of your services, your client may suffer significant losses.

Examples of negligence may include:

• Carrying out flawed or inaccurate valuations of companies;
• Other inaccuracies within the company accounts or failing to prepare accounts at all;
• Missing an important deadline to file information with Companies House (including but not limited to company accounts or confirmation statements); and
• Carrying out audits incorrectly.

Public practice activities are therefore justifiably reserved so that only individuals who have fulfilled the criteria required to obtain a practising certificate may be considered suitably qualified for this work. Further, by regulating public practice activity, consumers will have a right of redress via the complaints procedures of their accountant’s regulator. They may also be entitled to compensation which can be funded via an accountant’s compulsory professional indemnity insurance policy or, if available, a compensation scheme that is operated by one or more of the above regulatory bodies, such as the Investment Business Compensation Scheme, which is operated by the ICAEW, ICAS and the Institute of Chartered Accountants in Ireland (ICAI).

How do I obtain a practising certificate?

Eligibility criteria and the process of obtaining a practising certificate varies by professional body.

ACCA

In order to be eligible for a practising certificate, the member must fulfil the criteria for eligibility of a practising certificate under Regulation 6 of the ACCA Global Practising Regulations 2003. This includes being sufficiently qualified to carry on any activity constituting public practice (per Regulation 7), being fit and proper (per Regulation 8), holding the necessary professional indemnity insurance (per Regulation 9), and having made arrangements for practice continuity (per Regulation 11).

ICAEW

Regulation 4 of the ICAEW’s Practising Certificate Regulations state that a member is eligible to hold an ICAEW Practising Certificate only if:

• they have been a member of the ICAEW for two years;
• are compliant with CPD requirements under the ICAEW Principal Bye-laws;
• understand the Fundamental Principles set out in the Code of Ethics;
• have undertaken to comply with the ICAEW’s Professional Indemnity Insurance Regulations;
• are a fit and proper person to hold a PC;
• have submitted an application including payment of set application fees; and
• have passed an aptitude test if relevant.

ICAS

ICAS Regulation Board has a dedicated Committee which has the power to grant practising certificates. Regulation 3.8 of the ICAS Public Practice Regulations requires an applicant to satisfy this Committee that they:

• have the required level of competence and experience for all areas of work to be undertaken whilst engaged in Practice;
• comply with any additional training requirements deemed appropriate by the Committee;
• is a fit and proper person to hold a Practising Certificate;
• holds sufficient Professional Indemnity Insurance (to comply with the Professional Indemnity Insurance Regulations);
• has provided the Committee with all information requested in connection with the application for a practising certificate;
• has obtained not less than two years’ appropriate experience, in accordance with Regulation 3.9, which will include consideration of:
  • experience gained in a role in accountancy or a related role in public practice, business, public service, or teaching;
  • experience gained as a Principal in countries where a Practising Certificate is not, or was not previously, required; or
  • in the case of a Member admitted under reciprocal arrangements with other professional bodies, appropriate experience gained as an employee or as a Principal after the date of admission to the professional body; and
• Can demonstrate compliance with the ICAS’s Rules and Regulations, as appropriate.

IFA

In accordance with Regulation 5 of the IFA’s Public Practice Regulations, an Associate member or Fellow member of the IFA shall be eligible for an IFA practising certificate if the member:

• has achieved the educational requirements for an IFA practising certificate;
• has not less than three years of relevant practical experience, gained in the UK within ten years of applying for the practising certificate;
• is compliant with the Continuing Professional Development Regulations;
• understands the fundamental ethical principles set out within the IFA’s Code of Ethics;
• is considered fit and proper to be associated with the IFA and the accountancy profession; and
• has submitted an application to the IFA, together with the prescribed fee.

What are the implications for carrying out public practice without a practising certificate?

Failure to hold a practising certificate is likely to result in disciplinary action.

ACCA

An inadvertent failure to obtain a practising certificate can be remedied if the member regularises their position by:

• applying for a practising certificate; or
• ceasing to be a principal/partner/director of a public practice firm; or
• resigning from the ACCA.

In addition to the above, the ACCA will make sure that anyone who carries out one of the following roles is properly supervised for anti-money laundering (AML):

• a trust or company service provider;
• an auditor;
• an external accountant;
• an insolvency practitioner; or
• a tax adviser.

Members of the ACCA with a practising certificate are automatically subject to AML supervision by the ACCA. However, if they are engaging in public practice work as a principal/partner or director of a firm, and are doing so without a practising certificate, they must, if they wish to continue their work, apply for a practising certificate and register for AML supervision with HMRC pending issue of the practising certificate.

Alternatively, if they are not eligible for a practising certificate, they must resign from the ACCA and register for supervision with HMRC, or step down from being a partner/director or principal in the firm.

All cases will be disposed of by way of a disciplinary outcome, as the failure to register with an AML supervisor when providing any of the above services is a criminal offence.

Members of the ACCA who carry out public practice without a practising certificate may also incur possible financial penalties from the HMRC (for late registration) and from the ACCA. These penalties would be in addition to the usual fees required to obtain a practising certificate and register with HMRC for AML compliance.

ICAEW

Failing to obtain a practising certificate constitutes a breach of the ICAEW’s Principal Byelaws.  The ICAEW has noted in its Statement on Members Engagement in Public Practice (effective 1 January 2025) that: “Failure to hold a practising certificate when you would be considered to be engaging in public practice could result in disciplinary action against you.”

The ICAEW’s Guidance on Sanctions states that the starting point for penalties imposed for engaging in public practice without a practising certificate (which may be higher or lower depending on aggravating and mitigating circumstances) are:

• Less serious cases: a reprimand and a category F financial penalty (£1,000); or
• Serious cases: a severe reprimand and a category E financial penalty (£3,000); or
• Very serious cases: exclusion and a category D financial penalty (£5,000).

ICAS

The ICAS Sanctions Guidance sets out indicative penalties for practising without a current practising certificate, which range from a reprimand and a £2,000 financial penalty (for less serious cases), to an exclusion and a much larger fine (for which an indicative penalty is not set) for very serious cases.

The precise sanctions imposed will depend on several relevant factors, including:

• Extent and level of work undertaken;
• Period of time involved;
• Number of clients engaged;
• Level of threat to the public interest;
• Intent or reckless conduct;
• Genuine belief that a PC was not required or that a PC was in place;
• Misrepresentation and/or prejudice to clients or third parties;
• Level of benefit accrued (e.g. the level of fees); and
• A genuine attempt to act in the client’s interest.

IFA

Under Regulation 5.3 of the IFA Public Practice Regulations, failure to hold a current IFA practising certificate while engaging in public practice shall render a member liable to disciplinary action in accordance with the IFA Byelaws.

The IFA Sanctions Guidance sets out various non-financial orders and fines depending on the level of seriousness for a breach of practising without a practising certificate. This ranges from less serious (a reprimand and a fine of £500 - £1,500) to very serious (permanent/conditional removal from the register and a fine of £3,000 - £4,500).

If I have made a mistake, what should I do?

Whether your regulatory body has contacted you or not, you will need to stop carrying out work that falls within the definition of Practice (for ICAS) or ‘public practice’ (for the ACCA, ICAEW and the IFA) until you are certain you are compliant with your regulatory body’s rules.

You should think about seeking legal advice as soon as possible to understand whether you require a practising certificate and take the steps needed to regularise your position.  If your regulator has not contacted you, you may still need to adhere to obligations to report any instances of non-compliance. In any event, an open line of communication with your regulator will be essential to maintain trust and will form one of the first steps towards seeking to mitigate any risk of significant enforcement action being taken against you.

FURTHER INFORMATION

If you have any questions or would like to discuss any concerns you have about your practice, please contact our Regulatory team.