Qualified accountants – what exactly does this mean?

Qualified Accountants

There are accountants and there are Qualified Accountants.

Believe it or not, the term “accountant” is not a protected term like solicitor, surveyor or dentist. Literally anyone can set themselves up and call themselves an accountant.

This makes it dangerous for the uninitiated. You wouldn’t trust your health to an unqualified doctor, nor seek legal advice from an unqualified solicitor. Why then trust your finances with an unqualified accountant.

There are many accountants who claim to have sufficient experience, but to be honest – why take the chance? They are often not very much cheaper than qualified accountants. If they are as good as they say, do the right thing and take the exams – they should pass them if they are “as good as a qualified”.

You get a certain level of benefit from having a qualified accountant working for you. If you have a complaint then they must have a complaints handling process that can then be escalated to the supervising body – this is reassuring as the accountant can be disciplined by the body(and potentially be kicked out, thereby having to call themselves an unqualified accountant – think about that…).

They are also required to be insured, meaning additional recourse if things don’t work out.

Qualified accounts also have to maintain their professional training, and have ethical rules restricting them from “having a go” at something that are not proficient at.

You wouldn’t want to let a builder “have a go” at something they’ve never tried before, or a dentist “having a go” at a complex root canal.

I could go on.

Simply put if you want to make sure you have a certain level of protection you really need someone qualified by the follow organisations (technically anyone qualified by what is known as a designated professional body (DPB) who is a member of the CCAB)

Institute of Chartered Accountants of England and Wales ICAEW

ICAEW

These accountants have the designated letters ACA and are probably the most prestigious of all the accountancy bodies. You can’t qualify (unless things have changed since I trained) unless you have worked in public practice. This is important. Being an accountant who has only ever worked in a multinational makes them whole unsuited to small business accounting, or in fact advising in any capacity. Working in industry is very different to working in practice.

Maybe I am biased as I am an ACA but the standards, in my experience are very high!

By the way – be careful of accountants claiming some affiliation with the ICAEW but not being qualified (such as being a training provided –  its irrelevent!). Check here to see if your accountant is qualified with the ICAEW

Associate of Chartered Certified Accoutants ACCA

ACCAThese accountants are also “qualified accountants”. The thing to watch out for here is whether they are qualified in the UK (its international so its no good having someone who qualified in another country who knows nothing about UK tax or accounting standards).

Also, its worth noting that its more than possible to qualify without having ever working in practice. They accountants should really be avoided for public practice.

There are quite a lot of ACCAs. Its much easier to access training and much cheaper. On the whole though, ACCAs in practice to seem to be similar in standard to ACAs

ICAS and Chartered Accountants Ireland

Far fewer in number. I’ve not actually met any of these. ICAS (Scottish equivelent of ICAEW) appears to be the original Chartered Accountant (CA). Both PWC and Ernst Young do allow their students to study under ICAS, but most seem to want to qualify under the ICAEW.

You don’t come across these that often but they should be considered on par with ICAEW and ACCA accountants

Chartered Institute of Tax

Chartered Institute of Tax

I reserve these guys for a special area. These guys (and girls) are like the SAS of tax. They hold a category of their own. The CTA exams (as they are known, Chartered Tax Adviser) are some of the toughest and most grueling in the world. According to Grant Thornton Only around 500 people per year are admitted to the Chartered Institute of Taxation with a national pass rates in the 40% (and bare in mind these are some really really smart people taking these exams).

Why do they hold a category of their own?

Because usually in practice accountants will hold CTA as well as either the ACA or ACCA. Think of it often as a sort of post graduate degree.

The problem with CTAs is that they are sometime massively over-qualified for small business most of the time. There is a time and a place to roll them out, but most of the time it can be over-kill (and therefore over-fees!)

One to avoid in public practice – CIMA and CIPFA

Now this is just a personal opinion but CIMA is very much geared up towards management accounting (hence Charted Institute of Management Accounts). The body does have a mechanism to supervise public practice of CIMA accountants but I would personally just steer clear. These guys are industry players, not practice players really

CIPFA hold a similar position for me – these are Chartered Institute of Public Finance and Accountancy – not really that relevant to many small business accounting needs. You don’t however, tend to see it that often either

Who I would not consider Qualified Accountants

Association of Accounting Technicians (AAT) and Association of Tax Technicians (ATT)

AAT

 

Now, don’t get me wrong – these are fantastic qualifications. Really they are, but they are what trainee accountants sometimes takeATT before going for what is commonly referred to as the Full Qualification.

I have the utmost respect for people taking these exams but they are not quite at the same level. Yet!

Both these associations have link ups with the ICAEW and the CTA

 

Conclusion

Find a qualified accountant, either ACA or ACCA, possibly with the CTA qualification as well. There is no reason to go with an unqualified accountant

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