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Not all accountants are created equal (how do you choose an accountant)by Jason Holden on May 08, 2006My first contribution to this blog has resulted from a recent experience had by a new client of my practice with someone who also used the title ‘accountant’. Firstly, you need to understand in the UK there is no requirement to have any formal training or qualifications before calling yourself an accountant. This does not for one minute mean that someone without formal qualifications is going to be bad, not for one minute, so how do you chose your accountant? As with anything, I would always say choose an accountant on the recommendations of a friend/colleague. If you know someone who uses an accountant, and they are happy with them, then this is a good starting point. Next, does the accountant have relevant experience in the industry you are in, or an allied industry, after all, it’s going to make life a lot easier if he actually knows a bit about the industry you’re in when offering advice. But what if you don’t know anyone who can make a recommendation, what next? This is where I would definitely look for an accountant who belongs to a professional body, and holds a current and up to date practicing certificate, at least this way I would know this ‘stranger’ has gone through a certain standard of training and will have had to achieve a minimum level of experience before being admitted to membership. The decisions don’t stop there though, unlike other countries where there is either one or a very small number of professional accounting bodies, the UK has many, as shown at the end of this post. In summary, if you know someone who uses an accountant they are happy with meet them first, next find an accountant who understands your industry and finally if you have to make a selection on your own, then meet and interview at least three accountants before making your choice, remembering their membership of a professional body affords you some protection. Good luck! Here is the list of accounting bodies: The Association of Certified Accountants (ACCA) Professional bodies whose members cannot act as company auditors: Chartered Institute of Management Accountants (CIMA)
AAT, ACCA, Accounting, AIA, Bookkeeping, Business Development, Business Start Up, CIMA, CIPFA, CPA, CPAs, ICAEW, ICAI, ICAS, IFA, sme-blog 
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Said on May 8th, 2006 at 5:54 pm
I don’t agree with this because relationships vary from person to person. I’m more in favour of creating a shortlist of 3 and insisting on 1. third party references 2. fixed prices for compliance work as part of the selection criteria. I know this is anathema to hourly billing but…
Said on May 8th, 2006 at 6:26 pm
Dennis, it was not intended as the bible of how to chose your accountant, however, most people form friendships with like (type) people, and as you know Dennis most of us accountants are pretty easy to get along with, this would therefore support that if your friend gets on with his accountant and he sings his praises then chances are you will be okay too.
The main trust of the posting was that in the UK there are more non (formal) qualified accountants than those of us with a bit of paper, and if you use one without a professional body you could end up like our new client, up the creek with no paddle.
It is intended as a warning, if you can get a recommendation use it first, after that use someone who has a professional body behind them should you need to complain.
As for the other points your raised, we have client testimonials on our website and they are all happy to be approached, we also have a list of others who will give us a ‘third party reference’ and we have always had fixed prices for compliance work, no other way of doing it, so I guess what I am trying to say here is, I thought everyone did the same these days … but I guess not!
I really must be operating in the 1% band here I think?
Said on May 8th, 2006 at 7:54 pm
Are there more non-qualifieds plying their trade in the UK? If so then apart from the slack system that permits such things, the qualifieds can’t be doing such a great job – somewhere along the way.
Said on May 8th, 2006 at 8:09 pm
It’s not that those with paper qualifications are doing a bad job, it’s the fact that most people don’t realize accountants don’t have to be formally qualified to call themselves accountants.
After all solicitors, medical doctors etc all have to be formally qualified and people assume the same of accountants.
The Republic of Ireland looks like it has already started to make moves towards defining the term accountant with the establishment of the Irish Auditing and Accountancy Supervisory Authority in 2003.
I can’t see it happening in the UK though!
Said on May 13th, 2006 at 11:42 am
An update, some time ago, well March 2005 the ACCA called for the term accountant to be legally defined.
This week we have now seen the Association of International Accountants ‘AIA’
making the same call in a recent article.
Maybe I am wrong, maybe there will be enough pressure in the UK for the term accountants to be legally defined?
Said on May 30th, 2006 at 11:08 am
[...] Not all accountants are created equal (how do you choose an accountant) [...]
Said on June 22nd, 2006 at 12:51 am
[...] Remember my earlier posting, 'Not all accountants are created equal (how do you choose an accountant)' (http://www.sme-blog.com/?p=32), now is a good time to revisit this posting before you select your advisor. [...]
Said on September 18th, 2007 at 2:40 am
I refer to the post from Dennis
Would you trust an unqualified Doctor? Hopefully not! You should apply the same reasoning in selecting your accountant.
Members of the main accountancy bodies operating in public practice have undergone a great deal of training and verified practical experience before being allowed to offer their services to the public. They will also have professional indemnity insurance, be bound by the ethical rules, subject to the disciplinary procedures of their professional body. Members of the major accountancy bodies, such as ACCA, ICAEW, ICAS, CPA, ICAI and others are also subject periodic reviews of their files by their professional body and are required to keep up to date by engaging in Continuing Professional Development.
Unqualified “accountants” are not subject to any of the above. Therefore, the public have no way to determine the quality of service they should be getting before they engage the unqualified accountant and no recourse should the unqualified accountants work cost them.
Jason, the efforts, here, in the Republic of Ireland to get protection for the term “Accountant” at least in the context of practice continues. I feel 2008 will see the efforts of the accountancy bodies see results, in the form of legislation.
Diarmuid
Said on September 18th, 2007 at 10:29 am
Hi Diarmuid,
It’s good news what is happening in Ireland for those of us who are qualified, however, as I understand it the accounting landscape is different, with not as many ‘unqualified’ accountants in Ireland.
I can’t see it happening here in the UK ever, as the term auditor is protected/regulated and therefore as far as government is concerned that is enough, but good luck to Ireland in its move towards full protection of the term accountant.
Said on November 24th, 2008 at 3:54 pm
A recommendation is a good starting point when finding an acountant. The following points highlight the main areas to consider-
Recommendations – offers some reassurance, but not always a good gauge
Qualifications – Not legally required but sensible to use a qualified accountant
Location – Do you need to meet them, if so how often, can they visit you?
Size of the accounting business – Small may save money, but do they have the right skills. If there is only one accountant, what do you do when they take a holiday?
Fees – Cheap is not always good – Fixed fees or variable – Will a fixed fee cover all of your needs.
Meet the accountant – A face to face meeting can help. Accountants do have personalities
Ask questions – Be prepared to test their knowledge. Do they know your industry?
This list is not exhaustive, but an overview from the following information-
http://www.starting-business.org.uk/index.php?q=choosing-an-accountant
Said on February 5th, 2009 at 11:53 am
I have a quick question for you guys, if you receive bad advice and work from an accountant, which then leads into an investigation, can you claim against him ? or does the fact that you sign your accounts off mean he is not liable ?
Said on February 6th, 2009 at 11:31 am
As you sign everything you are personally responsible, unless it can be proved the accountant was negligent.
Some investigations are random, others from third party information and then there are those that are raised because something looks amiss.
Care to give more details as to why you say the advice led to an investigation?
Said on February 6th, 2009 at 11:35 am
Hi Jason,
Thank you for that, I was hoping you’d jump in here.
Stefan
Said on February 10th, 2009 at 11:29 am
I think the investigation came from the accounts handling for sure, and the investigation that he handled was a nighmare, went on for weeks, and cost a large sum.
I think it was probably a lesson learnt, and a note for everyone on here, make sure that you use a established recognised company, or the consequences can be very harsh.
Said on February 13th, 2009 at 5:10 pm
‘Went on for weeks’, that is not a lengthy investigation, trust me, they can go on for years
Said on February 19th, 2009 at 11:08 am
Thank you for your concern Jason, very kind. I am sure many investigations can go on much longer, but in this case the off shoot business in question was very small, with a very small turn over so not much to deal with….so trust me, for the size of the business it was a large problem. Just very glad it is now well passed.
I think everybody should just make sure that their affairs are dealt with by the book from someone that is reliable.
Said on March 4th, 2009 at 11:09 am
As you say, at least it’s over, and I very much doubt it is an isolated case, but maybe it does highlight you need to take care when choosing an advisor, and not to be price driven as some people are?
Said on July 2nd, 2009 at 1:11 am
Jason i would totally agree with your comment. I see it all too often when my accountants are rejected purely on price alone. I’m sure what some people don’t understand is that you rarely find a quality accountant for a budget price. Again as you say it’s really a matter of getting to know the accountant and recommendations are usually the best way to go. If you’re going to pay someone to take care of your accounts you really want to know that they are going to do the best job possible and price tends to reflect this.
At the end of the day if you pay peanuts you’re going to get monkeys!
Said on July 2nd, 2009 at 11:32 am
When I wrote this article back in May 2006 the economic climate was very different to what it is today and unfortunately I fear we will see more and more accountants setting up with cheap pricing, this will ultimately not serve the interests of the accountants business nor the clients.
It’s a sad fact, but some will always be price driven, and for some this is fine as their affairs are simple but for others they really need to move away from being price sensitive and look at service.
Said on July 14th, 2009 at 2:44 pm
Great post. I’ve had terrible experience with accountants – it is really hard to find one who is willing to explain matters. I got the feeling that most of them want to keep you in the dark so that you will be completely dependent on them forever. I’ll be printing this post and using it in the future, I’m sure!
Said on July 20th, 2009 at 12:27 pm
There are those that do talk ‘technical’ but rather than doing it to keep you in the dark I have come to the conclusion it may be because they do not really fully understand what they are talking about them selves and that way you are not going to question them!
That said, there are a few of us who do not talk technical but put it across in everyday language and not jargon.
Said on August 11th, 2009 at 12:14 pm
Good article – many thanks
Said on August 22nd, 2009 at 5:30 pm
I think its really hard to pick an accountant. Even refferals have to be questioned because my view is that you’d probably need to be an accountant in order to judge whether an accountant’s fee is justifiable – and to judge how good their work really is. Fees do seem vary substantially. I recently got a quote through www.accountantsquoteme.co.uk for Final Accounts and Self Assessment. I think prices are being driven down due to competition and the current climate and the fact that accountants in practice are losing those small and medium sized business clients who are folding up.
Said on August 24th, 2009 at 1:22 pm
I totally disagree with you John, you do not have to be an accountant to know if the fee is justifiable, everyone will know when the price is too high or too low.
Price may be driven down by some; however, we refuse to compromise on fees as they are set a realistic middle of the road, not the cheapest nor the most expensive rate.
Once you reduce your fee you reduce the quality of what you do which in turn attracts a lower level of client, but then I guess it depends on who you want for clients?
Recommendation still remains the best way to go, if someone has an accountant they are happy with, and if you see they have a decent business and the accountant advises them on a regular basis then that is a good start!
Also, although online quote sites have their uses they are usually aimed at the lower end and with a view to price (that is low price) rather than added value services that aid success.
Said on August 24th, 2009 at 1:35 pm
I think it is right to say that it is hard to pick an accountant – especially for business start-ups.
I also agree with Jason that price can not be the overriding deciding factor when it comes to selecting an accountant.
You Get What You Pay For – this certainly hold true today.
While technology allows to make certain things less expensive and often even provider a better product for less money – see WinWeb OnlineOffice as an example – services like accounting are knowledge based and as such not easily provided cheaper.
With cheaper, meaning less, accounting service comes bad service.
VB, Stefan
Said on August 25th, 2009 at 11:16 pm
In response to Jason’s comment “totally disagree with you John, you do not have to be an accountant to know if the fee is justifiable, everyone will know when the price is too high or too low”…
How Jason? When and how do you know when an Accountant is charging you too much? How do you make that visible to the fee payers, clearly? Seriously? People today want value for money. Why do Accountancy fees vary so much? Cheap accountants may not necessarily mean poorer services in my opinion, i.e. good accountants outside of city centres will have lower overheads and will be able to charge lower fees. Low cost accountants may not always mean that quality of services is lower. Is that a fair point?
Said on August 26th, 2009 at 9:31 am
[...] John Dickson In response to Jason’s comment “totally disagree with you John, you do not have… [...]
Said on August 26th, 2009 at 9:33 am
John & Jason,
Interesting points, see my post of today:
Small Business Accountants: What are they worth?
IMO, you both have a point, just depends what you want out of your small business accountant.
VB, Stefan
Said on September 30th, 2009 at 12:22 am
Very interesting to hear everybody’s experiences. I recently set up a small publishing business and interviewed half a dozen accountants before settling on a local chap who was brave enough to publish his fees on the web. The site is http://www.oxford-accountant.co.uk and has my firm recommendation. Nathalie
Said on November 11th, 2009 at 2:11 am
Very interesting. I would say you should definitely make sure they are a certified accountant but go even further to identify their experience with you industry. Just because they are certified doesnt mean they are expert in accounting for your field.
Said on July 2nd, 2010 at 10:51 am
This is the first time I visited the site and found out that most of the blogs here are interesting and very useful to people wants to learn more about accountancy issues. Keep posting!
Said on July 27th, 2010 at 6:49 pm
I was an accountant for almost 30 years, including being senior partner of a high street name practice. I eel it is only fair to say that, in all my years of experience, some of the worst problems I have come across related to qualified accountants!
You should always try to get recommendations when looking for an accountant, and remember that having a piece of paper is not a certain indication of ability. A more experienced accountant, qualified or not, is a far better choice.
I have retired to writing so it’s no longer any problem to me for telling the truth. Qualifieds often tend to knock the unqualifieds, but for many I have come across over the years the difference is often little more than their prices.