What makes a chartered accountant different?
What is a chartered accountant? How do they differ from non-chartered accountants? Are there differences in how they work and the tasks they can perform? These are questions that those seeking to hire the services of an accountant sometimes ask. In very real terms the difference between a chartered and a non-chartered accountant will be the level of training, the experience and the expertise that they can bring to their work.
There are also situations in which it is necessary to employ a chartered accountant as a non-chartered accountant cannot legally undertake some of the work required, particularly by larger companies.
Education, experience and ability
You will see at www.linghamscharteredaccountants.co.uk that chartered accountants are generally well educated and have a wealth of real world experience. At the education level a chartered accountant must possess a post-graduate degree. After obtaining such a degree a graduate must have completed at least three years of work at a required level in order to gain the full qualification of a chartered accountant. That work will have been carefully monitored, evaluated and executed under a mentoring program with a firm of chartered accountants.
The education received by someone who is able to practice as a chartered accountant will include all aspects of company law as well as accountancy.
Chartered accountants are required to engage in ongoing study after qualifying, so they are continually seeking to improve practice and expertise.
Any chartered accountant could undertake the kind of work an individual or company might ask a non-chartered accountant to undertake, for example book keeping, tax returns, issues related to payroll. However, only a chartered accountant can undertake more complex work such as auditing.
There is no requirement for an individual to register with any professional or other body to describe themselves as an accountant. To act on behalf of clients, however, they must register with Her Majesty’s Revenue and Customs (HMRC). A chartered accountant is required to register, within the UK, with the Institute of Chartered Accountants in England and Wales. Membership of such a professional body ensures that candidates are vetted and have attained the relevant levels of education and further, mentored work experience. Their continued development is also a requirement.
The benefits of employing a chartered accountant
Whereas accountants are often self-employed and deal with day to day matters within their ability as and when clients approach them (for example tax returns) chartered accountants will often be working for companies on an ongoing basis. Their understanding of all aspects of company law enables them to deliver first-class services to companies and ensure that the law is fully complied with.
In the cases of limited companies with a turnover of £6.5 million or more matters of financial administration and legal compliance become more complex. Auditing becomes a requirement and chartered accountants can audit limited company finances with a complete understanding of all of the complex issues related to the company.
For an individual or very small business with fairly straight-forward accounts an accountant will more than likely be able to provide the services required. It is now possible for individuals to complete self-assessment tax returns using the internet. But for larger companies with greater turnover, more staff and more complex structures, a chartered accountant can take a complete overview of all aspects of the business; the benefits are clearly considerable as an overall view rather than a focus on one or two specific issues will reduce any errors that arise due to working in isolation.