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Certified Public Accountant,
Chartered Accountant, etc.
|Competencies||finance, management skills|
|Education required||Bachelor's degree or higher in most countries, see professional requirements|
An accountant is a practitioner of accountancy or accounting, which is the measurement, disclosure or provision of assurance about financial information that helps managers, investors, tax authorities and others make decisions about allocating resources.
The Big Four auditors are the largest employers of accountants worldwide.
In the Commonwealth of Nations, which includes the United Kingdom, Canada, Australia, New Zealand, Hong Kong pre 1997 and several dozen other states, commonly recognised accounting qualifications are Chartered Accountant (CA or ACA), Chartered Certified Accountant (ACCA), Chartered Management Accountant (ACMA) and International Accountant (AAIA). Other qualifications in particular countries include Certified Public Accountant (CPA – Ireland and CPA – Hong Kong), Certified Management Accountant (CMA – Canada), Certified General Accountant (CGA – Canada), Certified Practising Accountant (CPA – Australia) and members of the Institute of Public Accountants (Australia), and Certified Public Practising Accountant (CPPA – New Zealand).
United Kingdom and Ireland
- 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)
- Chartered Accountants Ireland (CAI)
- a recognised equivalent body from another Commonwealth country (designatory letters being CA (name of country) e.g. CA (Canada))
- A Chartered Certified Accountant must be a member of the Association of Chartered Certified Accountants (designatory letters ACCA or FCCA).
- 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).
- An International Accountant is a member of the Association of International Accountants (designatory letters AAIA or FAIA).
- An Incorporated Financial Accountant is a member of the Institute of Financial Accountants (designatory letters AFA or FFA).
- An Associate Professional Accountant is a member of the Institute of Professional Accountants(designatory letters APA-UK or FPA).[importance?]
- A Certified Public Accountant may be a member of the Association of Certified Public Accountants (designatory letters AICPA or FCPA) or its equivalent in another country, and is usually designated as such after passing the Uniform Certified Public Accountant Examination.
- A Public Accountant may be a member of the Institute of Public Accountants (designatory letters AIPA, MIPA or FIPA).
Excepting the Association of Certified Public Accountants, each of the above 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, Chartered Certified, Chartered Public Finance, and International Accountants engaging in practice (i.e. 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.
The ICAEW, ICAS, ICAI, ACCA, AIA and CIPFA are six statutory RQB Qualification Bodies in the UK. A member of one them may also become a Registered Auditor 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.
All six RQBs are listed under EU mutual recognition directives to practise in 27 EU member states and individually entered into agreement with the Hong Kong Institute of Certified Public Accountants (HKICPA).
Further restrictions apply to accountants who carry out insolvency work.
In addition to the bodies above, technical qualifications are offered by the Association of Accounting Technicians, ACCA and AIA, which are respectively called AAT Technician, CAT (Certified Accounting Technician) and IAT (International Accounting Technician).
In Australia, there are three legally recognised local professional accounting bodies: the Institute of Public Accountants (IPA), CPA Australia (CPA) and the Institute of Chartered Accountants of Australia (ICAA). Other international bodies such as ACCA (The Association of Chartered Certified Accountants) and ICAEW (Institute of Chartered Accountants of England and Wales) enjoy recognition for the purposes of supporting their members in their careers. For instance, ACCA has achieved recognition by the Tax Practitioner Board, as Tax and BAS agents, in 2010.
Chartered accountancy is governed in Bangladesh by the Institute of Chartered Accountants of Bangladesh (ICAB).
In Canada, there are four recognized accounting bodies: the Canadian Institute of Chartered Accountants (CA) and the provincial and territorial CA Institutes, the Society of Management Accountants of Canada, also known as the Certified Management Accountants (CMA), the Certified General Accountants Association of Canada (CGA), and the Society of Professional Accountants of Canada (RPA). CA and CGA were created by Acts of Parliament in 1902 and 1913 respectively, CMA was established in 1920 and RPA in 1938.
The CA program is the most focused on public accounting and most candidates obtain auditing experience from public accounting firms, although recent changes allow candidates to obtain their experience requirements in industry at companies that have been accredited for training CAs; the CMA program focuses in management accounting, but also provides a general approach to financial accounting and tax; the CGA program takes a general approach allowing candidates to focus in their own financial career choices. 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. In British Columbia and Prince Edward Island, CAs and CGAs have equal status regarding public accounting and auditing; In the rest of Canada, CAs, CMAs, and CGAs are considered equivalents pursuant to provincial and territorial legislation. However, in practice, most public accounting and auditing in Canada is performed by CAs.
As of 2006[update], the Chartered Certified Accountant (ACCA or FCCA) is also recognized by the 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.
Starting 2011, a new framework was developed to unify the Canadian accounting profession under Chartered Professional Accountants of Canada (CPA Canada). The Society of Professional Accountants of Canada (RPA) was not included in the merger discussions. On January 1, 2013, CPA Canada was registered as a non-for-profit association, and CA and CMA members were elected as directors of the CPA Canada Board.
Chartered accountancy is offered in India by the Institute of Chartered Accountants of India (ICAI), the second largest accounting body in the world. This Institute was established in 1949 under the Chartered Accountants Act, 1949 for the regulation of the profession of Chartered Accountants in India.
The ICAI set up the Accountancy Museum of India in 2009, the third museum of accounting in the world. It is currently located at ICAI's office in Noida.
The Institute of Chartered Accountants of Pakistan (ICAP) offeres chartered accountant studies in Pakistan. ICAP was established under The Chartered Accountants Ordinance, 1961 as a self-regulatory body.
In New Zealand, there are two local accountancy bodies the New Zealand Institute of Chartered Accountants (NZICA) and the New Zealand Association of Certified Public Accountants (NZACPA) the operating name of New Zealand Association of Accountants Inc (NZAA).
To audit public companies an individual must be a member of either the NZICA or an otherwise gazetted body. Chartered Certified Accountant (Association of Chartered Certified Accountants or FCCA) qualification has also been gazetted under. An ACCA member can practice as long as they hold an ACCA public practice certificate (with audit qualification) in their country of origin.
In Sri Lanka, a chartered accountant must be a member of the Institute of Chartered Accountants of Sri Lanka (designatory letters ACA or FCA). It is the sole local accountancy body, therefore to audit public companies an individual must be a member of the ICASL.
In Austria the accountancy profession is regulated by the Bilanzbuchhaltungsgesetz 2006 (BibuG – Management Accountancy Law).
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.
HKICPA terminated all recognition of oversea bodies in 2005 for accreditation under professional accountants ordinance. In general, all British RQBs except for CIPFA were re-accredited. Please refer to HKICPA for latest recognition.
In Portugal, there are two accountancy qualifications: the Técnicos Oficiais de Contas (TOC), responsible for producing accounting and tax information, and the Revisor Oficial de Contas (ROC), more related to auditing practices. The TOC certification is exclusively awarded by the professional organization Ordem dos Técnicos Oficiais de Contas (OTOC), and the certification to become an auditor is awarded by another professional organization, the Ordem dos Revisores Oficiais de Contas (OROC). In general, accountants or auditors accredited by OTOC or OROC are individuals with university graduation diplomas in business management, economics, mathematics or law who, after further studies, applied for an exam and received the certification to be a TOC or ROC. That certification is only received after a 1-year (TOC) or 3-years (ROC) internship. Any citizen having a polytechnic degree as a bookkeeper is also entitled to apply for the exam and certification at the OTOC.
In the United States, licensed accountants are Certified Public Accountants (CPAs) and in certain states, Public Accountants (PAs). Unlicensed accountants may be 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. As noted above the majority of accountants work in the private sector or may offer their services without the need for certification.
A CPA is licensed by a state to provide auditing services to the public. Many CPA firms also offer accounting, tax, litigation support, and other financial advisory services. The requirements for receiving the CPA license vary 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 PA (sometimes referred to as LPA—Licensed Public Accountant) is licensed by the state to practice accountancy to a similar extent as are CPAs, except that PAs are generally not permitted to perform audits or reviews (Delaware is an exception, in that PAs are permitted to perform audits and reviews). A PA's ability to practice out of state is very limited due to most states having phased out the PA designation. While most states no longer accept new PA license applicants, six states still accept PA applicants for limited practice privileges within the state. As with the CPA, the requirements for receiving the PA license vary from state to state. Most states require a passage of either 2 or 3 (out of 4) sections of the CPA exam or passage of the Comprehensive Examination for Accreditation in Accounting which is administered and graded by the Accreditation Council for Accountancy and Taxation (ACAT).
A certified internal auditor (CIA) is granted a certificate from the Institute of Internal Auditors (IIA), provided that the candidate has passed a four-part examination. One of the four parts is waived if the candidate has already passed the CPA Exam. A CIA typically provides services directly to an employer rather than to the public.
A person holding the Certificate in Management Accounting (CMA) is granted the certificate by the Institute of Management Accountants (IMA), provided that the candidate has passed an examination of two parts and has met the practical experience requirement of the IMA. A CMA provides services directly to employers rather than to the public. A CMA can also provide services to the public, but to an extent much lesser than that of a CPA.
A person holding the ABA credential is granted accreditation from the Accreditation Council for Accountancy and Taxation (ACAT), provided that the candidate has 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 by non-licensed individuals, the practitioner may use the designation Accredited Business Adviser.
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- For example, in 2009 in Ontario, Canada, national firms employ 4,425 Chartered Accountants, which is less than 50% of the members in public practice. (Chartered Accountants in National Firms in Ontario, Canada) As total membership is 33,146, the national firms employ about 13% of all Chartered Accountants in Ontario. (Ontario Chartered Accountants demographics) Most of the members are employed in industry, with the majority in small and medium sized enterprises.
- Perks, R.W.(1993): Accounting and Society. Chapman & Hall (London); ISBN 0-412-47330-5. p.16
- Institute of Professional Accountants
- OROC official site; Access 2008
- OTOC official site