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The Accountancy Institutions
There are a number of professional accountancy bodies who supervise and regulate accountancy training, and there is rivalry among them, as each claim to have something special to offer to ‘would be accountant’. Below mentioned are some of the well-known institutes:
Association of Accounting Technicians, Association of Corporate Treasurers, Chartered Association of Certified Accountants, Chartered Institute of Management Accountants, Chartered Institute of Public Finance and Accountancy, Institute of Chartered Accountants in England and Wales, Institute of Chartered Accountants in Ireland, Institute of Chartered Accountants of Scotland, Institute of Company Accountants, Institute of Cost and Executive Accountants and Institute of Financial Accountants.
Under company law, certified and chartered accountants are accepted as qualified to carry out the company audits required by law. You cannot practice as a chartered or as a certified accountant unless you belong to the relevant professional body.
In order to help you make up your own mind about which qualification to aim for, the author has summarized and quoted from what the various organizations say about themselves, and their activities, in their publicity material. This may give you an idea of what the various bodies are like, as well as what they do, and the extracts have been selected to give as varied a picture as possible of the accountant’s work The different organizations will, of course, be able to give you much more information about their policies, regulations and services, and you should always write to them before taking a final decision. The address and telephone number of each organization is given at the end of their report. After most descriptions there is an interview with a young accountant who is a member, or hoping to become one, of that body, talking about his or her work. Some of the smaller accountancy bodies are also discussed.
Association of Accounting Technicians (AAT)
The Association of Accounting Technicians (AAT) was founded in 1980 and is sponsored by five leading accountancy bodies: the Chartered Association of Certified Accountants (ACCA), the Chartered Institute of Management Accountants, the Chartered Institute of Public Finance and Accountancy, the Institute of Chartered Accountants in England and Wales and the Institute of Chartered Accountants of Scotland. The Association provides qualifications, status and identity for staff working in finance and accountancy who do not necessarily intend to become fully qualified accountants. The AAT training scheme also gives access to the qualifications of the sponsoring bodies.
Accounting technicians are the skilled support staff working in accounting and finance. They are involved in preparing accounts and other financial data, including budgeting and costing, financial and management accounting, credit control and auditing. Experienced technicians can normally become staff managers. The AATs qualification is intended for all finance and accounting staff doing this kind of work in industry, commerce, the public sector, or in the office of practicing accountants. It is also accepted by most of the major accountancy bodies as fulfilling their educational requirements for admission for training and for exemption from some of their exams.
The AAT Education and Training Scheme is a modular scheme consisting of 28 units of competence, arranged in three levels: Foundation, Intermediate and Technician. The three stages are accredited by the National Council for Vocational Qualifications (NCVQ, SCOTVEC in Scotland) as National Vocational Qualifications in Accounting. They conform to National Standards about what people should be able to know, understand and do in order to be a competent accountant. Students must satisfy the assessment requirements at all three stages to qualify for membership.
The scheme is very flexible, and students who do not wish to take the full membership course can opt for separate units which are suitable for their particular job. Potential students can find out if their existing experience is relevant by completing the AAT Skill-check, preferably with the help of an Approved Assessment Centre (AAC). The Skill-check will help them to decide what further training or tuition they need. They can then get advice from the AAT or their employer on how to proceed.
Sarah left school at 17 with six GCSEs and started work as a typist in an office in Stafford. She then went on to become an accounts clerk with a building firm and did AAT classes at the local college in the evenings. Once she qualified with AAT, a vacancy occurred and she became departmental supervisor. Now, at 22, she is a computer services assistant with a construction company.
I was lucky because the building firm I joined as an accounts clerk had a policy of staff training and they were prepared to pay my fees to study for my AAT exams at college. They even gave me day release in the final year.
The work I did on that course was not always obviously relevant to me in that old job. They were a small firm and tended to do most of the accounting manually, whereas college gave me access to a computerized package.
In my new job as a computer services assistant with special responsibility for accounting systems, I can utilize the work we did at college on information systems and develop the management accounting system for this company.
Association of Corporate Treasurers (ACT)
Treasury managers are first and foremost business people. They are concerned with managing currencies and cash flows, and the complex strategies and policies of corporate finance. Their aim is to achieve profitability while maintaining a strong balance sheet and managing risk. All companies need some sort of treasury management, and most large companies now have separate treasury departments. The profession has emerged against a background of major changes in the financial markets, reflecting the recent technological changes, improved communications, the growth of multinational organizations and volatile international exchange and interest rates.
Membership of the Association depends on satisfying requirements under three principal headings: academic; current appointment and level of responsibility, experience and knowledge. Applicants must have the Association’s Diploma or a relevant professional qualification or degree. Mature applicants may also be accepted if they can show evidence of appropriate corporate treasury experience. Applicants must have an appointment with relevance to the treasury profession at senior management level.
The Association’s training programme consists of two separate parts. The first part consists of six papers on the main areas of treasury management. It leads to a qualification at first degree level, and qualifies the student for Associate Status of the Institute. It can be studied by distance learning combined with seminars. The texts for the first four papers are written by the Institute of Chartered Accountants of Scotland, who also provides tuition for the course. The second part leads to a qualification at MBA level, and builds on the underlying knowledge and techniques of the Associate Course. Successful completion gives eligibility for membership of the ACT. Study consists of a combination of distance learning and six one-day courses, plus a four-day residential school.
‘They are very broad financial exams, easily the most interesting, rewarding and challenging I’ve ever done… and I haven’t talked to anyone who’s done them who doesn’t think the same… stimulating you to formulate your own solutions to problems while offering high level financial training.’
Exemption from the first four papers of Part I is awarded to those who have completed the examinations of the ACCA, CIMA, CIPFA, ICAEW, ICAI, ICAS, and the Institute of Chartered Secretaries and Administrators. No exemption is granted for papers V and VI or for any paper of the Part II examination.
Institute of Company Accountants (ICOMA)
The Institute was founded in 1974 by the amalgamation of three long-established professional bodies of cost and commercial accountants. In 1981 members of the British Association of Accountants and Auditors were also taken into membership. In 1990, the name was changed to ‘Institute of Company Accountants’. Institute members work in managerial and accounting positions in a wide range of business and non-commercial organisations, for example colleges, universities and publishing houses. Those in public practice specialise in providing accountancy services to small businesses.
‘Proprietors of small businesses are entrepreneurs with capital at risk, driven by a belief in the product or service they offer. Support from their accountants must be sensitive, streetwise, and technically competent.’
Associate membership of the Institute is granted only by entrance examination.
The exams are in four parts, and exemptions may be granted for some or all of the subjects in the first three parts. Three years’ suitable practical experience must be gained before Associate-ship is granted.
Institute of Cost and Executive Accountants
The Institute of Cost and Executive Accountants represents accountants undertaking a wide range of work. It maintains a special interest group devoted to small business, as well as an insurance special interest group. Members are designated Incorporated Executive Accountant, FCEA or ACEA. The membership covers a wide range of activities and brings together many different kinds of experience and business information.
The Institute’s exams follow the requirements of the Common Market’s specifications for professional accountancy qualifications. Level 1, 2 and 3 exams are of first, second and third year degree level. The Fellowship exam is equivalent to honours’ degree standard of British universities. Exemption is granted on a subject-for-subject basis for recognised professional qualifications, BTEC Higher Certificates or for graduates.
The Fellowship exam is the ultimate test of competence and is not subject to exemption. Applicants must produce a Certificate of Competence stating that they have had at least three years’ experience and are competent to maintain a full set of accounts.
An executive accountant must be able to interpret and communicate his or her technical knowledge to solve practical problems. He or she is expected to play an active role in strategic decision making and implementation of policy at board level, rather than merely providing information designed to assist others to make decisions. The syllabus has been framed for these purposes and, in marking papers, Association examiners take into account clarity, presentation, logic of argument, and use of concise and lucid English, as well as assessing the candidate’s ability to administer finance and control financial operations.
Institute of Financial Accountants (IFA)
The Institute was incorporated in 1916, and was the first professional body to represent internal accounting. It still emphasizes the distinction between in-house accounting, which evolved from bookkeeping, and public auditing. Achievement and experience are valued equally with academic results. Members work in public bodies, education, private practice and charities, as well as in commercial firms.
The IFA requires a formal assessment of an applicant’s understanding and knowledge as well as practical accounting skills, based on national standards. This means that the IFA will admit people as members who may not have the necessary formal qualifications but who can demonstrate that they meet these national standards. There are three routes to Institute membership: examinations, exemptions and Accredited Prior Learning. The Institute offers a four-part professional exam in 14 papers. Study is available through selected colleges or distance learning. Exemptions are available to holders of equivalent qualifications.