Wednesday, December 27, 2006

Qualified or unqualified?

Most people are unaware that the word ‘accountant’ can be used to describe a range of different people. It’s not like ‘dentist’ which always means someone who is qualified to check your teeth.

Anyone can call themselves an accountant or bookkeeper even if they have no professional qualifications. But if any laws are broken, it will be you, not your accountant, who pays the penalty.

If you are serious about making money in your business the chances are that you will want to engage a professionally qualified accountant. That means someone who has passed tough exams and belongs to one of the professional accounting or tax institutes. This will also ensure that your accountant has to abide by a strict code of professional ethics which should mean they are more reliable and that they carry professional indemnity insurance to compensate you if things go wrong. Finally, if it all goes wrong you will be able to complain to the professional institute if you don’t get the service that was promised.

The most common qualifications and designatory letters that are likely to be relevant are:

Chartered Accountant - ACA or FCA – Member or Fellow of the ICAEW (Institute of Chartered Accountants in England & Wales).

Chartered Accountant - CA – Member of ICAS (Institute of Chartered Accountants in Scotland)

Chartered Certified Accountant - ACCA or FCCA – Member or Fellow of the ACCA (Association of Chartered Certified Accountants)

Chartered Management Accountant – ACMA or FCMA – Member of CIMA (Chartered Institute of Management Accountants)

Chartered Tax Advisor - CTA or ATII – Member of the Chartered Institute of Taxation

Less relevant qualifications because they imply a more junior level of experience include:

AAT – Member of the Association of Accounting Technicians

ATT – Member of the Association of Tax Technicians

It’s invariably safer to rely on professional advice than the ‘advice’ of a friend who’s always bragging as to how he’s got one over on the taxman. Using a professional adviser gives you a degree of credibility. The taxman knows the adviser is not going to be “cooking the books” and so you should be at less risk of tax enquiries and investigations. Having said that the taxman (HMRC) is changing the way it works and asking questions by reference to a range of factors so having a professional adviser will not be enough to ensure the taxman leaves you alone.


At 10:41 PM, Blogger David Weeks said...

I realise that you are modest fellow and it may be just my idle curiosity but which of this plethora of possible qualifications do you happen to hold?

Absolutely no criticism intended!

At 11:17 PM, Blogger Mark Lee said...

And none taken David.
I'm proud to be a Fellow of both the ICAEW and of the CIOT.

At 12:52 PM, Blogger David Waugh said...

This indeed is a very great piece of work and tactfully written. It is not just going to help accountants but common man as well


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