What is a Chartered Accountant?

What is a Chartered Accountant

If you’re interested in becoming an accountant or even if you’re in the market for accounting services, you may have wondered about the term “chartered accountant.” Also referred to as CA, this type of professional is one that offers a number of significant benefits, but whose position is less in the spotlight than other forms of accounting professionals.

Accounting majors who are interested in working abroad might ask, “What is a chartered accountant?” Chartered accountants are experts in the laws and regulations governing businesses in various countries around the world. As international corporations become increasingly influential, they will need highly trained accountants to keep track of their expenses and revenue. Tax laws and business regulations can differ greatly between countries, and CAs are certified to help businesses remain profitable and in compliance with local laws and regulations.

What Is a Chartered Accountant?

Chartered Accountant

Chartered accountant designation is worldwide, and it refers to professional accountants who are qualified to take on a number of specific activities within the spectrum of accountancy. Such tasks include auditing financial statements, filing of corporate tax returns, and financial advising. While the name is seen around the globe, in the United States, the equivalent position is known as a certified public accountant, or CPA. The professional body that governs this group of accounting workers goes back to 1854 where it was founded in Britain. There are now several associations that act as governing and accrediting bodies for these professionals, such as the Canadian Institute of Chartered Accountants and the Institute of Chartered Accountants in England and Wales.

What Chartered Accountants Do

There are four areas in which these accountancy professionals serve. They are taxation, financial accounting and reporting, applied finance, and management accounting. The specialization an accountant chooses determines under which umbrella he or she works. Chartered accountants can wear a number of hats. It’s possible that they may oversee a corporation or business’s entire accountancy needs. They may have a more narrow function such as being in charge of just one aspect of a business like auditing or taxes. Many of these highly skilled workers will go out on their own as freelancers or consultants for hire.

How to Become a Chartered Accountant

How to Become a Chartered Accountant

How to become a chartered accountant depends upon the country where you want to work, as each has its own requirements for certification. Regardless of specifics, chartered accountants do meet more stringent academic and practical requirements than other levels of accountants. In most cases, there is a standard bachelor’s level degree consisting of coursework in business and accounting subjects, followed by a practicum or internship or some kind and then a specific program in chartered accounting principals. A person must be quite dedicated in order to achieve the rank of CA, but the position is a well-respected one that usually carries a higher salary than other types of accountant.

Since CAs tend to work overseas, it’s important for them to have professional connections in foreign countries. Some CAs work in American accounting firms preparing tax documents and filing tax returns for corporations that conduct international business. Job opportunities for American chartered accountants are limited, so most certified accountants in the US work as certified public accountants. These titles are roughly equivalent. In foreign countries such as India and New Zealand, CAs play the role of CPAs.

Becoming a CA in a foreign country is similar to becoming a CPA in the US. For a licensed CPA to become a CA, no further education is necessary. In this case, all that is required is a license to practice accounting in a foreign country. In contrast, an accountant without any postgraduate training will have to complete a CA program before becoming licensed.

Steps to Get Certified as a Chartered Accountant

Established in May 1880, the Institute of Chartered Accountants in England and Wales (ICAEW) has certified more than 181,000 members across more than 140 nations. This organization provides the Associate Chartered Accountant (ACA) certification after several steps. First, individuals must complete at least three years of on-the-job training in accountancy. The 450 or more days of hands-on work experience must be finished with over 5,000 ICAEW-authorized employers. Some popular training providers include Grant Thornton, KPMG, Bishop Fleming, Nagle James, Myers Clark, Ernst & Young, and Goodman Jones. Meanwhile, accountants must pass 15 digital exam modules focused on financial reporting. Certain students can waive modules with credits for prior learning (CPL). For instance, the University of Florida’s International Executive Master of Accounting provides eligible credits.

In the first 12 months, accountants work on achieving the Certificate in Finance, Accounting, and Business (CFAB). This credential requires six fundamental modules: Accounting, Management Information, Principles of Taxation, Law, Assurance, and Business Technology & Finance. These entry-level modules are available online or in classrooms with a £165 registration fee. Aspiring chartered accountants must then pass a 1.5-hour, computer-based exam at a proctoring center. If passed, accountants build atop that certificate to earn the Business and Finance Professional (BFP) credential. This mid-level, professional stage in the second year covers six more modules: Business Planning, Financial Management, Tax Compliance, Auditing, Financial Accounting, and Business Strategy. Here individuals must pass a 2.5-hour, in-person paper exam to qualify. Getting ACA certification ends with three senior-level modules, including a case study project.

Gaining an undergraduate degree, experience, and passing tests at ICAEW-approved centers isn’t all though. Associate Chartered Accountants must properly maintain their knowledge. Certified members must stay up-to-date with Continuing Professional Development (CPD) credits. Every three years, chartered accountants must engage in 90 or more CPD hours. At least 15 CPD credits are mandated annually. Chartered accountants keep their skills fresh with formal and informal training sessions. The ICAEW hosts workshops, conferences, and seminars for CPD hours. Members receive a 75 percent discount off the Essentials CPD webinar online. The Institute of Chartered Accountants in England and Wales library has free e-books or journals to read. CPD courses are available in nine niches, including data analytics, banking, corporate treasury, and valuation. Continuing education keeps ACAs knowledgeable about new regulations.

Skills Every Chartered Accountant Must Possess

Chartered Accountant Skills

Thinking of becoming a chartered accountant? Building a successful global accountancy career requires several unique skills. Chartered accountants must have methodical problem-solving skills to fix financial reporting errors. Mathematical skills are important to properly analyze numbers and conduct basic calculations. Communication skills are needed to work well on global accounting teams. Many chartered accountants know multiple foreign languages to speak with diverse business leaders. Cultural competency is essential to respect people’s differences abroad. Organizational skills help chartered accountants keep pristine financial records. Time management skills are handy to meet required deadlines, such as tax filing dates. Technological skills are critical to use today’s cutting-edge accounting information systems. Chartered accountants must also have the business acumen to make smart money decisions.

Chartered accountants must be highly analytical and detail-oriented. They have a responsibility to ensure that their clients’ finances are balanced and follow all local laws and regulations. That’s why CA programs are country-specific. CAs need to thoroughly understand the tax laws and business regulations of the countries where their clients operate.

Depending on the circumstance, a CA may have to learn specialized information about a nation’s accounting laws and customs before starting a job. These requirements will be more common for CAs working in large, diverse countries such as Brazil and India where businesses sometimes operate under heavy government regulation. With enough self-discipline, perseverance and targeted research, anyone can work toward becoming a successful CA.

Where Chartered Accountants Can Practice

According to the ICAEW, 98 percent of the biggest global companies hire chartered accountants. Professionals can work at virtually any multi-national organization in every sector from energy to medicine. Chartered accountants have the proven skills to help diverse for-profit and nonprofit businesses achieve their financial goals. International accounting firms are far from the only place hiring ACAs. Banks, investment brokerages, corporations, charities, hospitals, software startups, and more hire chartered accountants. Chartered accountants can be found analyzing financial data anywhere where money is monitored. Most chartered accountants work overseas in small nations like Luxembourg or big countries like Australia.  Forbes lists the United Kingdom, Sweden, Hong Kong, the Netherlands, and New Zealand as the best countries for business.

Difference Between Chartered Accountants vs. CPAs

United States residents frequently hear the term “Certified Public Accountant.” CPAs are highly trained accountants who’ve completed at least 150 credits of post-secondary education. Getting a Master of Accounting or Master of Business Administration is required after a bachelor’s degree. The American Institute of CPAs then administers a four-part certification exam. Achieving a 75 score or better on all four-hour sections within 18 months is mandated. Most U.S. states require new CPAs have at least six months of supervised work experience too. Certified Public Accountants have job opportunities in the U.S. and some nations abroad. Chartered accountants are qualified outside America. However, both ACAs and CPAs follow the same Generally Accepted Accounting Principles. Both necessitate continuing education credits to learn the latest industry practices too.

How Much Money a Chartered Accountant Makes

The Institute of Chartered Accountants in England and Wales reports an average member salary of £108,000. Chartered accountants in business have a £134,000 mean wage. In American dollars, these numbers equal about $134,762 and $167,223 respectively. To compare, Certified Public Accountants have median earnings of $119,000. CPAs receive an average lifetime income boost of $1 million by getting certified. The Bureau of Labor Statistics estimates a $78,820 mean annual wage for America’s 1.25 million accountants. This is equivalent to $37.89 per hour. The lowest 10 percent of accountants make $43,650 while the top 10 percent of accountants make $122,840 on average. Median accounting income ranges from $55,070 to $92,910. The federal executive branch has the highest-paid accountants with $100,080 mean pay. Chief Accounting Officers (CAOs) have the biggest average of $219,700.

Future Job Outlook for Chartered Accountants

Landing a chartered accountant job overseas shouldn’t be too difficult. The U.S. News & World Report classifies accounting as the 42nd best job with low unemployment of 1.8 percent. CNBC recognizes chartered accountants for having the sixth most in-demand job in the United Kingdom. LinkedIn listed accounting and compliance among the 10 most in-demand skills in Asia. Demand for qualified accountants, especially those with ACA or CPA certification, is growing. The Bureau of Labor Statistics predicts that the employment of U.S. accountants will jump by six percent. From 2018 to 2028, the number of domestic accountants will rise by 90,700. That’s a much better 10-year outlook than that of accounting clerks. Entry-level accounting jobs, including bookkeeper, will see a four percent decline for 65,800 fewer openings. Investing in accounting education and certification enhances one’s ability to find quality positions.

Reasons Chartered Accountants Are in Demand

There are a number of reasons why a business, corporation or individual would want to hire a chartered accountant. Many financial and accounting matters are quite sensitive and require someone incredibly knowledgable to undertake them. Business people want to feel assured that their financial issues are being competently handled, without the worry of legal ramifications or errors that could cost them money. They want to hire the best and most qualified accountants.

The international demand for CAs has steadily increased for decades, and it has never been greater than it is today. Although the demand for CAs in the US is relatively low, it’s naturally very high in countries that require certified accountants to have a CA license. From India to New Zealand, CAs are in high demand, especially in firms that conduct international business.

Like medicine and law, accounting is a job that requires specialized knowledge, so business owners must hire professionals to do the job. International businesses that need a high level of accounting expertise will hire chartered accountants to handle their books. The global surge in demand means that more jobs will be available for CAs in big firms as well as private practices.

As you can see, there are lots of reasons you might want to become a chartered accountant. A chartered accountant earns a great salary, is respected within the industry, and can work under their own set conditions.

As the global economy becomes more interconnected, CAs will play a larger role in international business. Becoming a CA is a straightforward process, but it’s also very challenging. The growing importance of developing economies in the coming decades will ensure that more and more people ask, “What is a chartered accountant?”

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