Accounting is a profession with a broad scope. Accountants work in all fields and industries. Since every company or organization deals with financial information, they need accountants to overlook their finances. Usually, accountants need to qualify and have a degree to get a job in any field. However, some fields do not require any specific requirements.
However, there are some areas where accountants need specialized knowledge to work. These may include auditing, tax consulting or preparation of financial statements. Usually, accountants must obtain a license or membership with an accounting body to qualify for these. The most prevalent qualification or membership among these is chartered accounting.
What is a Chartered Accountant (CA)?
A chartered accountant is a term used to denote accounting professionals. This term is common in many countries and jurisdictions around the world. Some countries may also have other names for it, for example, the US. Chartered accountants in the US are known as Certified Public Accountants (CPA). Nonetheless, it is crucial for these accountants to go through a process to become a member or obtain a license.
Chartered accountants are professionals that serve in all fields. These individuals usually go through various exams and work experience to get their membership. The process for becoming a CA will differ from one jurisdiction to another. Similarly, the accounting body with which accountants register will also have specific rules regarding it.
Chartered accountants can perform a variety and a broad number of financial tasks. These may include auditing, accounting, tax consulting, advisory, preparing financial statements, and much more. These individuals also have to take exams for these areas to work. Usually, their knowledge is significantly more than what other accountants have.
Usually, chartered accountancy bodies require accountants to satisfy two critical requirements. These include education and experience. These areas allow chartered accountants to obtain the expertise and knowledge necessary to operate in their field. Similarly, the bodies will require them to meet specific hours or times during both of these to qualify.
What do Chartered Accountants do?
A chartered accountant can provide a wide variety of services. Some CAs will have a specific field of specialization and only provide services in their specific field. However, most CAs have enough knowledge and expertise to perform most primary tasks required of accountants. Some of the work that chartered accountants perform include the following.
- Preparing, reporting and examining a company’s financial statements according to the applicable financial standards.
- Auditing a company’s financial statements in accordance with the relevant auditing standards.
- Preparing and filing corporate and individual tax returns.
- Providing tax advisory services.
- Overlooking the finances for mergers, acquisitions and capital restructuring.
- Personal and corporate financial advisory.
- Financial management within a company.
- Forensic accounting to support litigation.
- Management accounting according to a company’s policies.
- Budget preparation and analysis.
The above are some of the most common tasks that chartered accountants perform. However, they can also advise on various areas where regular accountants don’t have the expertise. Some chartered accountants work in companies or other organizations in the accounting departments. Others may also work within their own businesses as financial advisors or accountants.
What is the difference between a Chartered Accountant and other accountants?
Due to the similar names, people often confuse chartered accountants with normal accountants. Both chartered accountants and regular accountants perform tasks in a similar environment. Similarly, some overlap may exist between their tasks. However, chartered accountants have a significantly broader scope than other accountants.
The most primary difference between chartered accountants and normal accountants is their qualifications. Chartered accountants go through a rigid process that requires both education and experience to become a member. Other accountants usually don’t need the same. They may get their qualification through studying diploma programs or foundation-level courses. Similarly, they don’t need to meet experience requirements to be accountants.
Chartered accountants also are members of a chartered accountancy body. In some places, they also obtain a license to practice their work. However, accountants do not have any membership or association with such bodies. Similarly, they don’t require licenses to carry out their work. Some accountants don’t even need to have a college degree to practice in the field.
The work that chartered accountants performs also differs from other accountants. Usually, CAs undertake complicated and complex tasks. Their work requires specialized knowledge, which they acquire through years of education and experience. Regular accountants perform low-level tasks. Their work provides the base for the tasks that chartered accountants perform.
What is the difference between FCA and ACA?
The designations used for chartered accountants may differ from one country to another. Similarly, the accounting body will also dictate what terms chartered accountants can use. The most common title within these includes chartered accountant or CA. CA is a designation used to describe anyone who is a member of a chartered accountancy body.
Once registered, CAs go through various requirements to become a member. As mentioned, the first process includes obtaining the education that can help them with their work. This education may come from universities or other institutes. After acquiring knowledge, some accountancy bodies will allow candidates to refer to themselves as affiliates. Affiliates are chartered accountants who haven’t completed the experience requirements for becoming a CA.
After becoming an affiliate, candidates must meet the experience requirements set by the body. Usually, most accountancy bodies require candidates to meet at least three years of experience. Some bodies may also specify the areas to which this experience must relate. After completing the experience requirements, candidates can become a member. At this stage, they become members or associates. They can use the designation ACA for their name.
An ACA is a chartered accountant who has completed both the education and experience requirements. The term ACA stands for Associate Chartered Accountant. Anyone who fails to meet any of these requirements cannot designate themselves as ACAs. These candidates usually have less than five years of experience after becoming chartered accountants.
Any chartered accountant candidates who pass their exams and reach the experience requirements can use the designation ACA. However, there is a further step for CAs that can provide them with a higher rank. Usually, once associate chartered accountants meet those requirements, they can become fellow chartered accountants.
The next step for ACAs after getting their designation is to become an FCA. An FCA is a term that stands for Fellow Chartered Accountant. Acquiring an ACA designation is the first step to securing an FCA designation. Chartered accountants who are not ACAs cannot apply to become an FCA. However, these individuals must first meet some requirements.
The most common requirement to become an FCA after being ACA is five years of work experience. There is no examination or tests involved to get this designation. Some accountancy bodies will also specify the areas to which this experience must relate. The FCA designation is the highest rank that chartered accountants can get from their accountancy bodies.
FCAs usually have some privileges due to their designation. In some countries, only FCAs can become a partner in an auditing or chartered accountancy firm. Overall, FCAs must meet the requirements to become an ACA first. Once they do so, they must then satisfy the criteria to get the FCA designation. It is the primary difference between ACA and FCA.
Chartered accountants are accountancy professionals that perform a wide variety of tasks. These accountants require both education and experience to become chartered accountants. Once they meet these requirements, they get the ACA designation. ACAs must meet further experience requirements, usually five years, to become FCA.