How is a chartered accountant different from an accountant?
Accountancy is a diverse profession which enables both qualified and unqualified practitioners to provide services to companies on an employed and self-employed basis. As well as the Institute of Chartered Accountants in England and Wales (ICAEW), there are a wide range of other professional bodies offering accountancy qualifications in the UK.
The Association of Accounting Technicians (AAT) and Association of Tax Technicians (ATT) are just two of the bodies students can be affiliated to, but some accountants, although having no recognised qualifications, are highly qualified by experience alone.
They may have been employed in an accountancy role for many years, but simply chosen not to study for a recognised qualification. Although this can limit some of the tasks they’re able to carry out on a day-to-day basis, it doesn’t necessarily diminish their level of knowledge and expertise, and in most cases they offer stability and reliability.
The title ‘accountant’ is not legally protected in the same way as ‘solicitor’ or ‘doctor’ however, so anyone wishing to call themselves an accountant can do so. For this reason, it’s important to be aware of their background, potential limitations on how they can help you, and their level of experience.
What tasks might an accountant carry out on a practical basis?
An accountant who is not chartered may be responsible for:
- Recording of all business transactions
- Ensuring that transactions are posted to the correct account
- Self-assessment tax returns on behalf of company directors
- Administration of the payroll and associated payments/returns to HMRC
- Acting as an agent for the company in the preparation and submission of statutory accounts and returns, including VAT
- Preparation of cash flow forecasts and other management data such as profit and loss accounts and balance sheet information
- Providing advice on technology and accounting software options
How does a chartered accountant differ in their role?
- In order to become chartered, an accountant must be a member of their professional body – in England and Wales this is the Institute of Chartered Accountants in England and Wales (ICAEW).
- Candidates have to pass the relevant accountancy exams and undertake practical work experience, usually over a period of three to five years.
- Ongoing professional development is an obligatory part of their professional membership, and ensures that knowledge is always current.
- The advanced level of education undertaken by a chartered accountant means they take on a different, higher level role during their career – this could range from specialising in taxation, audit, or insolvency, for example.
- Chartered accountants are obliged to follow a strict code of ethics set by their professional body, and can be disciplined if they fail in this respect.