Accountant vs. Chartered Accountant: What are the differences?
There are two common professionals associated with managing financial records, an ‘Accountant’ and a ‘Chartered Accountant’. These two roles may sound similar but there are significant differences between the two. In this article, we are going to discuss those differences to help you understand their roles in the world of finance.
What is a Chartered Accountant (CA)?
A Chartered Accountant is a professional who has obtained a Chartered Accountancy qualification from a recognised professional body. Normally, this qualification is obtained through one of the following common Chartered Accountancy Bodies:
- The Institute of Chartered Accountants in England and Wales (“ICAEW”)
- The Institute of Chartered Accountants of Scotland (“ICAS”)
- The Chartered Accountants Ireland (“CAI”) for Northern Ireland and the Republic of Ireland
- The Association of Chartered Accountants (“ACCA”)
- The Chartered Institute of Management Accountants (“CIMA”)
Chartered Accountants are highly qualified and experienced professionals. They are able to provide a wide range of financial and business advisory services and usually work in areas such as audit, accounts, tax, financial management, and business consulting.
To qualify as a Chartered Accountant, individuals must complete high level training and an examination process to demonstrate their skills and knowledge to be a Chartered Accountant.
What does a Chartered Accountant do?
A Chartered Accountants work involves advising on many aspects of tax planning, financial management and reporting which include:
- Financial reporting and compliance;
- Audit and assurance;
- Financial advisory;
- Management accounting;
- Forensic accounting;
- Insolvency and restructuring;
- Risk management;
- Compliance and regulatory matters;
- Continuing professional development;
- Corporate finance; and
- Other specialist accountancy services
What qualifications and training does a Chartered Accountant need?
In the UK, the process of becoming a qualified Chartered Accountant involves a combination of further education, professional training, and passing specific exams. The main qualifications and steps to become a Chartered Accountant in the UK are as follows:
1. Educational qualifications
Typically, qualified Chartered Accountants have a strong educational background with a degree in an accounting and finance-related field. However, Chartered Accountancy bodies do accept candidates from a variety of educational backgrounds. In some cases, this would mean longer and more in-depth professional training compared to those who have already obtained a degree in an accounting or finance-related fields.
2. Choosing a Chartered Accountancy body
Each candidate will need to choose a chartered accountancy body to train with. The most notable bodies are as follows, the Institute of Chartered Accountants in England and Wales (“ICAEW”), the Association of Chartered Certified Accountants (“ACCA”), and the Chartered Institute of Management Accountants (“CIMA”). Each body has its own specific qualification and examination process.
3. Completing professional qualifications
Once enrolled with a professional body each candidate will need to go through an examination process which includes a number of exams and other criteria. In addition to passing the examinations, each candidate must gain practical experience whilst working in an appropriate company. This can be within practice or industry, depending on the Chartered Accountancy body.
4. Work experience
Relevant practical experience is also required as part of becoming a Chartered Accountant. This experience is usually obtained through either a ‘training contract’, which we offer on our graduate scheme, or via other work experience. Most chartered accountancy bodies require around three years work experience to complete the required amount of practical experience needed to qualify as a Chartered Accountant. However this does vary between Chartered Accountancy bodies.
5. Professional ethics and competence
A key part of becoming a Chartered Accountant is demonstrating the ability to show ethical behaviour by adhering to the professional and ethical standards of your chosen Chartered Accountancy body. Demonstrating this is required as part of becoming a Chartered Accountant and is also required annually.
6. Continuing professional development (CPD)
Once qualified, as a Chartered Accountants, there is a continued requirement to stay up to date with the latest accounting standards and regulations. All of the Chartered Accountancy bodies have their own requirements for CPD which can vary significantly.
After completing all of the requirements, successful candidates are then able to apply for full membership from their chosen Chartered Accountancy body. Once membership has been approved, they can use the ‘Chartered Accountant’ title.
Differences in the roles of an Accountant and a Chartered Accountant?
Qualifications and certification
Typically, an accountant will have a bachelor’s degree in accounting or a similar subject or they will have gained practical experience working as an accountant. However, it is important to note that an accountant does not need to complete specialist training that a chartered accountant is required to complete and their title is not protected.
As stated above, a Chartered Accountant has to undergo a high-level training process to use their title and are seen as more qualified than an accountant to advise on more complex financial situations.
Responsibilities and scope of work
Accountants are primarily responsible for more basic accounting tasks related to bookkeeping, maintaining financial records, using financial systems and preparing financial statements. They often work for individuals, small businesses, or within teams of large corporations, handling day-to-day financial transactions, reconciling accounts, using accounting systems and ensuring that financial data is accurately recorded.
Accountants may specialise in various areas of financial matters, such as tax accounting, forensic accounting, or management accounting, but their scope generally revolves around record-keeping and basic financial analysis. They provide essential financial information for decision-making but are not typically involved in high-level financial planning.
Chartered Accountants take on more extensive and complex financial roles. They are often involved in high-level financial planning, financial analysis, and strategic decision-making. They also play a significant role in auditing financial performance, ensuring that financial statements are accurate and comply with relevant regulations.
Chartered Accountants may work in various sectors, including public practice, private sector, industry and government. Their scope of work extends to areas such as auditing, taxation, financial advisory, and consulting. They are well-equipped to offer strategic financial guidance to organisations and individuals.
Accountant vs. Chartered Accountant. Which is better?
The main difference between an Accountant and a Chartered Accountant is their scope of work. An accountant will normally be responsible for more basic financial tasks such as bookkeeping and record keeping. Whereas Chartered Accountants play a more strategic role in financial management and decision-making. Furthermore, a Chartered Accountant are more qualified than an accountant and will have more responsibilities.
Which you choose depends on your specific needs. A Chartered Accountant is more appropriate for complex or specialist services and are seen as being able to provide better advice than an accountant. Furthermore, it is important to note that chartered accountants are regulated to a very high standard.
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