Updated: May 29, 2020
Qualifications are important for an accountant - but the industry is not as regulated as you might imagine.
When you need a new accountant, there can be many things you will take into account as you choose who will look after your firm or your personal finances.
Whether they are local
You may prefer a small firm or a large company
Their accessibility and communication
All these considerations are important, but have you thought about your accountant’s qualifications? What do those letters after their names mean - and what if they don’t appear to have them?
Strange but true: the unqualified accountants
It may surprise or even shock you to learn that people are allowed to operate as accountants in the UK without formal qualifications. The industry is not as tightly regulated as you might think!
That might not necessarily mean someone calling themselves an accountant will be incompetent, but it does mean that you would have no comeback if they made a mess of your accounts and left your business in trouble financially or with the law.
By contrast, when you have formally qualified accountants, they are bound by the regulatory bodies that they gain their certification through. This means you can directly approach these bodies with a grievance if your accountant lets you down or fails to uphold the professional ethics that they are committed to. Think of it as being the accountancy equivalent of your doctor’s Hippocratic Oath.
Qualifications to look out for
The minimum qualification someone should get to be a proper accountant is the AAT professional diploma. This formally qualifies someone to work as an accountant, but they would not count as a chartered accountant with just this qualification.
Becoming a chartered accountant involves securing further qualifications to become a fully-fledged member of a professional body. As a client, you can have greater confidence in someone with chartered status, as this means they are accountable to their professional body for their conduct.
There are three main bodies whose qualification acronyms you should look out for:
ACA (Associate Chartered Accountant) - this is issued by the Institute of Chartered Accountants in England & Wales (ICAEW). ICAS is the equivalent body for Scotland.
ACCA (Associate Chartered Certified Accountant) - this comes from the Association of Chartered Certified Accountants (CCA)
CIMA (Chartered Insititute of Management Accountant) - this is the qualification of the Chartered Institute of Management Accountants (CIMA)
These bodies differ in various ways. For example:
ICAEW is a body that students in England and Wales will qualify through
The other two are international qualifications recognised in the majority of countries in the world
The CIMA qualification is specific to managed accountants
However, these differences are fairly technical and the distinctions are not something clients need to worry too much about. What matters is that as long as your accountant is a ember of one of these professional bodies you can be sure you have a properly trained accountant accountable to their membership organisation.
Needless to say, at Richard & Co all our senior accountants are certified chartered accountants, while everyone who has ever joined us in a junior position has done so while working towards their qualifications.
So, while it is true there are some unqualified accountants out there - and, let’s be honest, some are rogues - you can be sure that will absolutely never be the case with us.