Accountants

This is a background article. See Psychological studies of accountants

Accountant, or Qualified Accountant, or Professional Accountant, is a certified accountancy and financial expert in the jurisdiction of many countries. Such as other legally-restricted professions including medical doctors and lawyers, different countries have their own training and examination systems to maintain the practice quality and restrict the number of qualified accountants in their jurisdictions.

Accountants originally worked only in public practice, selling advice and services to other individuals and businesses, but today, in addition, many work within private corporations, the financial industry and various government bodies.

Accountancy (profession) or accounting (methodology) is the measurement, disclosure or provision of assurance about financial information that helps managers, investors, tax authorities and other decision makers make resource allocation decisions.

Practitioners of accountancy are known as Accountants. There are many professional bodies for accountants throughout the world, some of them are legally recognized in their jurisdictions. Such as British qualified accountants including Chartered Certified Accountant (ACCA or FCCA) or Chartered Accountant (CA, ACA or FCA), Canadian qualified accountants such as Chartered Accountants, Certified General Accountants and Registered Public Accountants (CA, CGA or RPA)as well as American qualified accountants such as Certified Public Accountant (CPA).

The Certified Management Accountant (CMA) designation is unusual in the United States in that it does not have a statutory basis. However it is accepted by industry and by its peer associations. In Canada the Canadian CMA desingation is recognised under provincial/territorial legislation.

What does an accountant do?
Since Accountants are independent business advisers, they are in a position to help the clients build and develop their businesses. Accountants can offer an extensive range of services. Some of the types of services they may offer are listed below.

Auditing a company
Accountants, who are legally registered auditors, may audit a company's accounts - such an audit may, in some circumstances, be required by law.

Assurance and Information Integrity
Accountants also can provide a variety of services that improve and assure the quality of information, or its context, for business decision-making. And also be ensuring that financial statements reflect fairly the financial performance of the company.

Forensic Accounting
Preventing, detecting, and investigating financial frauds such as embezzlement, securities fraud, tax evasion, and money-laundering schemes.

Environmental Accounting
Addressing how companies can be both environmentally responsible and profitable. This includes focusing the variety of projects like environmental compliance audits and managing and preventing claims and disputes.

Expert witness work
Accountant who has his/her own country's registry of expert witnesses who meet stringent criteria - all hold practising certificates, have undertaken suitable litigation training, have had experience of acting as an expert witness, and have been able to provide references from legal practitioner who have engaged them.

Insolvency work
If the clients are facing the possibility of personal bankruptcy or corporate insolvency, an accountant with his/her own country's insolvency licence can provide the clients with invaluable advice. If professional advice is sought as soon as the signs of trouble appear, then insolvency/bankruptcy may be avoided. If the clients are a trade creditor and are concerned about a debtor or have been told that a debtor is insolvent, a licensed insolvency practitioner can investigate and advise on the best course of action. To become an accountant with his/her own country's insolvency licence, stringent criteria must be met and an ongoing experience requirement must be achieved if the licence is to be renewed each year.

Accounting and Bookkeeping
Advice can be provided on setting up business systems, from basic bookkeeping (cashbook) to comprehensive management reporting. Some accounting firms will undertake the bookkeeping function, which may also include VAT return preparation. Practitioners can also assist in the preparation of year-end accounts.

Management accounting
Accountants may set up systems to ensure that the clients know how their businesses are performing. Additional services offered include budgeting and performance monitoring and helping to ensure that a business runs in a smooth and efficient manner.

International Services & Accounting
Provide services to support and facilitate commerce in the global market. Moreover, companies adopting International Financial Reporting Standards (IFRS) may need accountants to help reconcile IFRS with their local GAAP. Professionals with knowledge of U.S. GAAP who work well in an international environment are increasingly in demand.

Corporate finance
Accountants may offer advice on how to finance a business and how to buy or sell a business, as well as other related considerations. Such as providing a variety of services to organizations and individuals that interpret and add value by utilizing a wide range of financial information. These include everything from tax planning and financial statement analysis to structuring investment portfolios and complex financial transactions, and evaluating financial information to assess liquidity, solvency and stability issues of a firm and provide meaningful information which serve as the basis for management to make informed decisions.

Investment advice
Advice may be sought on pensions, unit trusts, life insurance etc., from advisers authorised to give investment business advice.

Tax - statutory requirements and planning opportunities
Accountants are able to offer advice on tax including corporation tax, income tax, capital gains tax, PAYE and VAT. In addition, business advisers can also offer tax planning advice and minimise your tax liability now and in the future.

Management consulting
Accountants can provide independent advice to managers of businesses, such as provide advice and insight on the financial and non-financial performance of an organization's operational and strategic processes through broad business knowledge and judgment. Such help can be used in a variety of ways, including:
 * providing an external independent view
 * overseeing the stewardship of the chairman/chief executive and board members
 * encouraging and developing new ideas
 * assisting the company in difficult situations
 * bringing specialist knowledge
 * maintaining an ethical climate.

Advice on starting up a business
Accountants may offer advice on the legal form most appropriate to starting up a business. In addition they may advise on related legal and taxation issues, business plans for presentation to banks, and what you should expect when starting up a business.

Accountancy qualifications and regulation
The requirements for entry in the profession of accounting vary from country to country.

Accountants may be licensed by a variety of organisations, such as the Association of Chartered Certified Accountants (ACCA) and Institute of Chartered Accountants, and are recognized by titles such as Chartered Certified Accountant, Chartered Accountant, Certified Public Accountant, Certified Management Accountant, Certified General Accountant and Certified Practising Accountant. Many countries recognise two or more accounting bodies. There is, however, no legal requirement for an accountant to be a paid-up member of one of the many Institutes and other bodies which are effectively a form of professional trade union. Unlike the Law Society, which can legally stop a solicitor from practising, accountancy institutes do not have such authority. Generally, certain specialised areas of accountancy such as auditing and insolvency are tightly regulated.

Commonwealth of Nations
In the United Kingdom, Canada, Australia and several other Commonwealth of Nations countries, the equivalents of Certified Public Accountant (CPA) include Chartered Certified Accountant (ACCA), Chartered Accountant (CA or ACA), Chartered Management Accountant, International Accountant, Certified Public Accountant (CPA - Ireland and CPA - Hong Kong), Certified General Accountant (CGA - Canada), and Certified Practising Accountant (CPA - Australia).

United Kingdom
In the UK, there are no licence requirements for an individual to be describe himself/herself or practice as an accountant (except in the areas of audit or insolvency) but to use certain titles requires membership of one of the many appropriate professional bodies.


 * A Chartered Certified Accountant must be a member of the Association of Chartered Certified Accountants (designatory letters ACCA or FCCA).


 * A Chartered Accountant must be a member of one of the following:
 * the Institute of Chartered Accountants in England & Wales (ICAEW) (designatory letters ACA or FCA)
 * the Institute of Chartered Accountants of Scotland (ICAS) (designatory letters CA)
 * the Institute of Chartered Accountants in Ireland (ICAI)
 * a recognised equivalent body from another Commonwealth country (designatory letters being CA(name of country) eg CA(Canada))


 * An International Accountant must be a member of the Association of International Accountants (designatory letters AIAA or FAIA).


 * A Chartered Management Accountant must be a member of the Chartered Institute of Management Accountants (designatory letters ACMA or FCMA).


 * A Chartered Public Finance Accountant must be a member of the Chartered Institute of Public Finance and Accountancy (designatory letters CPFA).

Each of these bodies admits members only after passing examinations and undergoing a period of relevant work experience. Once admitted members are expected to comply with ethical guidelines and gain appropriate professional experience.

Chartered Certified, Chartered and International Accountants engaging in practice (ie selling services to the public rather than acting as an employee) must gain a "practising certificate" by meeting further requirements such as purchasing adequate insurance and undergoing inspections.

Accountants holding "practising certificates" may also become Registered Auditors in accordance with the Companies Act, providing they can demonstrate the necessary professional ability in that area and submit to regular inspection. It is illegal for any individual or firm that is not a Registered Auditor to perform a company audit.

Further restrictions apply to accountants who carry out insolvency work.

In addition to the bodies above, the Association of Accounting Technicians offers its members training and support in accountancy skills.

For more details regarding British qualified accountancy professionals, please refer to the page of British qualified accountants.

Canada
In Canada, there are three recognized accounting bodies: the Canadian Institute of Chartered Accountants (CA) and the provincial and territorial CA Institutes, the Certified General Accountants Association of Canada (CGA), and the Society of Management Accountants of Canada, also known as the Certified Management Accountants (CMA). CA and CGA were created by Acts of Parliament in 1902 and 1913 respectively and CMA was established in 1920.

The CA program focuses on public accounting and candidates must obtain auditing experience from public accounting firms; the CGA program takes a general approach allowing candidates to focus in their own financial career choices; the CMA program focuses in management accounting. The CA and CMA programs require a candidate to obtain a degree as a program entry requirement. The CGA program requires a degree as an exit requirement prior to certification.

Auditing and Public Accounting are regulated by the provinces. Historically, only CAs can perform audits in Ontario. In 2004, the provincial government of Ontario passed a new Public Accounting Act that would allow qualified CGAs and CMAs to perform audits, conditional on their organizations being able to demonstrate that their qualification and regulatory programs are equivalent in rigour to that of the CA program. As of March 2006, this process of evaluation had not yet begun. In Quebec as well, CAs still have exclusive public company audit rights by statute. In British Columbia and Prince Edward Island, CAs and CGAs have equal status regarding public accounting and auditing; In the rest of Canada, CAs, CGAs, and CMAs are considered equivalents pursuant to provincial and territorial legislation.

As of year 2006, the Chartered Certified Accountant (ACCA or FCCA) is also recognized by Canadian government as an eligible qualification to audit federal government institutions in Canada. Furthermore, The Canadian branch of ACCA is pursuing recognition for statutory audit purposes in the province of Ontario under the province's Public Accounting Act of 2004

Australia
In Australia there are four main local professional accountancy bodies.


 * Certified Practising Accountants (CPA) are members of CPA Australia.


 * Professional National Accountants (PNA) and Member of National Institute of Accountants (MNIA) are members of National Institute of Accountants Australia.


 * Chartered Accountants are members of the Institute of Chartered Accountants in Australia.

However, the Chartered Certified Accountant (ACCA or FCCA) qualification is also recognised as a prescribed body for insolvency purposes under the Corporation Act 2001, section 1282 and for audit purposes by ASIC under Practice Statement 180 Auditor recognition in Australia.

New Zealand
In New Zealand, there is only one local accountancy body, the New Zealand Institute of Chartered Accountants (NZICA).

To audit public companies an individual must be a member of either the NZICA or an otherwise gazetted body. Chartered Certified Accountant (ACCA or FCCA) qualification has also been gazetted under the relevant act (Under Section 199 of the Companies Act 1993: Qualifications of Auditors). An ACCA member can practice as long as they hold an ACCA public practice certificate (with audit qualification) in their country of origin.

Ireland
Ireland tends to take its lead from the United Kingdom. In a positive move, the Irish Auditing and Accounting Supervisory Authority has recommended to the Minister for Trade & Commerce, Michael Ahern, that the term "accountant" be statutorily protected, only allowing members of recognised bodies to use the term. RTE news article on proposed statutory recognition of term "accountant"

United States of America
In the United States, legally practicing accountants are Certified Public Accountants (CPAs), and other non-statutory accountants are Certified Internal Auditors (CIAs), Certified Management Accountants (CMAs) and Accredited Business Accountants (ABAs). The difference between these certifications is primarily the legal status and the types of services provided, although individuals may earn more than one certification. Additionally, much accounting work is performed by uncertified individuals, who may be working under the supervision of a certified accountant.

A CPA is licensed by the state of his/her residence to provide auditing services to the public, although most CPA firms also offer accounting, tax, litigation support, and other financial advisory services. The requirements for receiving the CPA license varies from state to state, although the passage of the Uniform Certified Public Accountant examination is required by all states. This examination is designed and graded by the American Institute of Certified Public Accountants.

A CIA is granted a certificate from the Institute of Internal Auditors (IIA), provided that the candidate passed a rigorous examination of four parts. A CIA mostly provides his/her services directly to his/her employer rather than the public.

A CMA is granted a certificate from the Institute of Management Accountants (IMA), provided that the candidate passed a rigorous examination of four parts and meet the practical experience requirement from the IMA. A CMA mostly provides his/her services directly to his/her employers rather than the public. A CMA can also provide his services to the public, but to an extent much lesser than that of a CPA. please see the attached

An ABA is granted accreditation from the Accreditation Council for Accountancy and Taxation (ACAT), provided that the candidate passed the eight-hour Comprehensive Examination for Accreditation in Accounting which tests proficiency in financial accounting, reporting, statement preparation, taxation, business consulting services, business law, and ethics. An ABA specializes in the needs of small-to-mid-size businesses and in financial services to individuals and families. In states where use of the word "accountant” is not permitted, the practitioner may use Accredited Business Advisor.

The United States Department of Labor's Bureau of Labor Statistics estimates that there are about one million persons employed as accountants and auditors in the U.S.

U.S. tax law grants accountants a limited form of accountant-client privilege.

Hong Kong SAR
In Hong Kong, the accountancy industry is regulated by the HKICPA under the Professional Accountants Ordinance (Chapter 50, Laws of Hong Kong). The auditing industry for limited companies is regulated under the Companies Ordinance (Chapter 32, Laws of Hong Kong), and other Ordinances such as the Securities and Futures Ordinance, the Listing Rules, etc.

For further details see Accountancy in Hong Kong.