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It is very common for people, even accountants, who haven’t been in the industry long enough, to ask what the difference is between a certified and a chartered accountant. In addition, the question that follows is that is it really useful to hire a certified or a chartered accountant for business, or is it just a waste of money? Well, the answer to the latter, in a nutshell, would be Scott Butterfield’s all fitting answer: it depends. I’ll discuss it in detail later in this article; but first, let’s get to the certified versus chartered.
Really, the difference between certified and chartered is what the dictionary says. However, the difference between certified and chartered accountants, is, well, irrelevant. If you didn’t already know, here’s another interesting one for you: there’s also a group out there called the Association of Chartered Certified Accountants (ACCA). So, one accountant here is both chartered and certified.
I often hear Chartered Accountants picking on all other certified accounts, including FCAs, ACCAs, IMAs and CMAs etc., but there’s really no reason to be doing that. East of the United States, with an exception to Australia, the equivalent of a Chartered Accountant is a Certified Public Accountant. Therefore, the term Certified Public Accountant in the US is equivalent to the term Chartered Accountant in the UK and other countries that follow the UK convention. So, what is a CPA or a CA? Well, basically, if you’re either of these, you can conduct audits, and primarily audits for public, .i.e., stock exchange listed, companies. In a nutshell, that is the difference. Passing the CPA or CA exam is no evidence of an accountant’s technical ability or understanding of management accounting, tax accounting, or financial accounting. For what it is worth, I have met non-certified, non chartered accountants with more accounting acumen than CPAs and CAs alike.
Other ‘Certified’ or ‘Chartered’ Accounting Designations, such as the CIMA, ACCA, IMA, CMA etc. are management accounting designations, i.e., they prepare you more for operational and managing the business kind of accounting rather than the audit kind, which naturally makes them more, shall I say, interesting, challenging, creative, and less dull (if there is any such thing in accounting). Note, once again, that ultimately, a certification is a piece of paper, and you can get horrible qualified accountants too.
In many ways, accounting is a field like law. Just because one holds a license or a certificate, doesn’t mean one makes for a good accountant. Some lawyers are just plain good, and if you’re familiar with the legal system, good trial lawyers don’t really require any knowledge of the law; good public speaking skills here are essential.
Similarly, good accounting, and hence good accountants, is/are not measured by certificates or qualifications. What’s important in the case of a good accountant is the ability to translate numbers, debits, credits into money making business, and vice versa. There aren’t a whole a lot of accountants who can successfully do this, because a thorough understanding of business is required to become a good accountant. I say this, quite simply, because as is the case with public accountants (CPAs and CAs), their primary job is compliance with the law regarding financial reporting, which basically means you have to be able to read and follow instructions. Anyone can do that. It is the application of basic accounting principles across complex business models that can drive growth that separates an ‘accountant’ from a, erm…someone who just has a certified piece of paper.
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