All the King’s Horses – Accountancy Qualifications Explained

Amazingly enough, in the UK you don’t need any sort of qualification or experience to call yourself an accountant and offer services to the public (although you do have to register directly with HMRC if you intend to represent clients). You might think that this leaves the industry as a whole open to all kinds of charlatanism and fakery and, to a certain extent, it does. Bogus accountants do exist and are often able to extort large sums of money from clients unfamiliar with normal charges and levels of service. There are, however, a broad range of accountancy qualifications and the vast majority of accountants in the UK will possess one. Most of these qualifications require a particular standard to have been reached and to be maintained throughout a practitioner’s working life, offering considerable reassurance as to the value and integrity of the service provided for clients.

With so many qualifications out there, it can all be a bit confusing. This article describes some of the main accountancy qualifications in more detail, with reference to some of the differences between them and the benefits to you of engaging one type of accountant over another. Hopefully, this will help you to decipher what’s written on the brass plaque outside your accountant’s office, or on promotional material provided by prospective partners.

ACCA Chartered Certified Accountant

The Association of Chartered Certified Accountants (ACCA) is one of the principle professional organisations and awarding bodies for financial and audit accountants in the UK, with a particular emphasis on international working. Since the award of a royal charter in 1996, Certified Accountants are often confused with Chartered Accountants (see below, and also our blog about the difference between these professional bodies), [link to what’s the difference blog] although in practical terms, to the client, there isn’t much difference at all.

The ACCA qualification takes three to ten years to complete (most students manage it in three) and requires a pass in fourteen exams with some exemptions available for students with relevant qualifications in finance, business or accountancy. Entrance to the course is usually through a degree in a related subject, but entry can also be made by

HND/BTEC, Advanced GNVQ or a NVQ Level 3 or Level 4. In fact, the association sets its own admission rules and may also award ACCA status, upon application, to accountants with equivalent qualifications from abroad.

Have a look at our blog comparing Certified and Chartered accountants for more information.

ICAEW/ICAS/ICAI, ACA and FCA Chartered Accountant

The Institute of Chartered Accountants in England and Wales (ICAEW), in Scotland (ICAS), and Ireland (ICAI), are professional bodies predominantly representing financial chartered accountants in the UK. All Chartered Accountants in the UK (as opposed to Chartered Certified Accountants – see above) must belong to one or more of these institutions. Members typically take the letters ACA (Associate) or FCA (Fellow) after their names; this last only by application after at least five years in practice.

Enrolment in the ACA course is more strict than for the ACCA, and typically requires a degree (though not one in a related subject.) Accountancy Technicians (usually holders of the AAT qualification) are also able to apply for admission through a professional route (see below). The course takes at least three years, or longer for those without a degree; it requires the successful completion of fifteen exams and 450 hours of appropriate professional experience.

Membership is open to accountants and potential students from a range of (predominantly Commonwealth) countries, including Australia (ICAA), Canada (CICA), New Zealand, South Africa, Zimbabwe, and Hong Kong (HKIPA). Potential students from Malaysia, Mauritius and Cyprus are also able to train in their own countries for the ACA.

Have a look at our blog about the difference between Chartered and Certified Accountants for more information about these qualifications.

CIMA Accountant in Industry and Commerce and ACMA

Often called simply Management Accountants, members of the Chartered Institute of Management Accountants (CIMA) are typically much more business orientated than other types of accountant. They might be more focussed on forecasting and the generation of bespoke reports for analysis of specific performance issues. They will also, for the most part, be capable of taking a more strategic role within a business. Have a look at our blog about the difference between management and financial accounting for more information about this. [Link to management vs financial blog]

Assessment for membership is rigorous. In order to become CIMA qualified, candidates must pass the entry level CIMA Certificate of Business Accounting, which contains five papers at A-Level standard, as well as the CIMA Professional Qualification, which comprises six managerial exams called the Advanced Diploma of Management Accounting, three strategic exams and an assessment of professional competence. Exemptions from the entry-level exams are available for some candidates with professional or degree-level qualifications from elsewhere.

Membership of the professional body is contingent on successful completion of the Professional Qualification as well as a three-year period of supervised professional practice. Following this, accountants may use the suffix Associate Chartered Management Accountant (ACMA).

CIPFA Chartered Public Finance Accountant

Public Finance Accountants work in a range of public sector institutions where they are involved with financial planning and management, audit and the implementation of financial systems. Some will also work in the private sector.

The Chartered Institute of Public Finance Accountants (CIPFA) offers membership on a scale dependent on the completion of a number of exams. Entry to the program is through HND or degree and, though any type of qualification at this level is acceptable, relevant qualification may allow for exemptions from some parts of the course. The entry (Certificate) level entails four exams and means that successful candidates are eligible for Affiliate Membership of CIPFA. Diploma Level comprises five full and two half-modules, and allows for Associate Membership. The final level includes two modules of professional competence and is required for full CIPFA membership.

AAT/CAT Accounting Technician

Frequently employed as account clerks, payroll assistants, income supervisors, account assistants and finance officers, qualified Accounting Technicians are integral in various supporting roles at all levels of finance and industry.

The training program has three levels: Foundation, Intermediate and Technician, each of which is equivalent to a level of NVQ or SVQ qualification from two-four. Candidates with NVQ accountancy qualifications can enter the program at the corresponding level. Having completed the technician stage a student is allowed to use the suffix AAT.

In addition to the AAT route, Accountancy Technician qualifications can also be obtained through the ACCA (see above). Entry to the Certified Accounting Technician (CAT) course that they offer is on the basis of the ACCA criteria (see above). This course also comprises three levels: Introductory, Intermediate and Advanced, and successful candidates are able to enrol onto the full ACCA accountancy program after a period of appropriate professional experience.

Continuing professional development for technicians, as much as for accountants, is important to both institutions. The AAT qualification incorporates a CPD scheme called Corporate Training Partners, which guides newly qualified technicians through the years after their certification. Both types of technician can also extend their qualification to a BSc in Applied Accounting through the ACCA.

Auditors

Auditors are typically accountants with additional qualifications who perform specific functions (that is, Audit functions) for or within a business. Audit itself is a process of data collection, checking and balancing, categorised either as Internal or Statutory External. Internal Audit is a process by which a company improves its own performance by gathering data about its operations and the state of its finances for periodic review. Internal Auditors are typically employed to do this within a company. Statutory External Audit, on the other hand, is a legal process, which involves the handover of company books to independent individuals who check the accounts to ensure that everything is in order and within the bounds of the law. External Audit is required for all private limited companies whose payroll numbers, turnover and asset values exceed certain thresholds determined by HMRC (see here [link to https://www.gov.uk/audit-exemptions-for-private-limited-companies] for more details). External Statutory Auditors usually work for firms of Chartered and Certified Accountants (see above), the National Audit Office, which audits departments of central government, or the Audit Commission in Scotland.

Internal Auditors need no additional qualifications beyond those normally required for an accountant (i.e., none at all). However, given the complicated nature of much of their work, they are almost always members of one or more of the professional bodies listed above, or their equivalents in another country. In addition to this, they may have undertaken training with the Institute of Internal Auditors (IIA). There are three stages to this training. The practitioner qualification (PIIA) is a basic-level course consisting of seven modules including principles and practice of internal audit, risk and control issues, governance and an appreciation of accounting practices. The MIIA (Membership) is the professional qualification consisting of four modules designed for experienced and senior practitioners, it has a strong knowledge component and covers practice, risk and corporate governance as well as audit committees. Finally, the Qualification in Computer Auditing (QiCA – no pun intended there, I’m sure) is concerned with the audit of information-gathering systems and processes.

Whilst Internal Auditors are largely left to get on with it (the only people who suffer if they are incompetent is the company that employs them), External Audit, on the other hand, is strictly regulated. External Auditors must be registered with a professional accountancy body (e.g., ACCA or ICAEW) as a Registered Auditor. This involves making an application to the ICAEW or other Recognised Supervisory Body (RSB), which is then assessed based on the accountants’ appropriate work experience, and an inspection of the firm for which they work. Prospective External Auditors should also be registered with the Joint Audit Register, which holds a list of all RSBs, the firms registered with them and their full postal address, as well as a list of individuals within that firm who are Registered Auditors. It’s a useful resource if you’re looking for an auditor for your company.

Accountant in Private Practice

This simply means an accountant who is not employed directly by companies or by the state, but rather works through a firm of accountants providing any of the services listed above, and more besides. They are typically engaged by fee-paying clients for particular services or in order to take on a supervisory or financial directorship type role within the company. They may or may not hold any of the qualifications listed above and/or be members of various professional organisations. This designation describes the majority of accountants you’ll find if you search, for example, for Accountants in the Northwest on the internet, or take a walk around your local financial district.

Pointers

  • The Association of Chartered Certified Accountants (ACCA) is one of the principle professional organisations and awarding bodies for financial and audit accountants in the UK
  • The Institute of Chartered Accountants in England and Wales (ICAEW), in Scotland (ICAS), and Ireland (ICAI), are professional bodies predominantly representing financial chartered accountants in the UK
  • Members of these institutes typically take the letters ACA (Associate) or FCA (Fellow) after their names
  • Management Accountants are members of the Chartered Institute of Management Accountants (CIMA) and are typically much more business orientated
  • Members of this body may use the suffix Associate Chartered Management Accountant (ACMA)
  • CIPFA Chartered Public Finance Accountants work in a range of public sector institutions
  • Qualified Accounting Technicians are integral in various supporting roles at all levels of finance and industry, and use the suffix AAT
  • Accountancy Technician qualifications can also be obtained through the ACCA through its Certified Accounting Technician (CAT) course
  • Auditors are typically accountants with additional qualifications who perform specific audit functions for or within a business
  • An accountant in private practice means simply an accountant who is not employed directly by companies or by the state, but rather works through a firm of accountants

 

Apr 14, 2015