Not all accountants are created equal (how do you choose an accountant)

My 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)
The Association of International Accountants (AIA)
The Institute of Chartered Accountants in Englandand Wales (ICAEW)
The Institute of Chartered Accountants of Scotland (ICAS)
The Institute of Chartered Accountants in Ireland (ICAI)
Chartered Institute of Public Finance and Accountancy (CIPFA)

Professional bodies whose members cannot act as company auditors:

Chartered Institute of Management Accountants (CIMA)
Certified Public Accountants (Ireland) (CPA)
Institute of Financial Accountants (IFA)
Association of Accounting Technicians (AAT)

AAT, ACCA, Accounting, AIA, Bookkeeping, Business Development, Business Start Up, CIMA, CIPFA, CPA, CPAs, ICAEW, ICAI, ICAS, IFA, sme-blog

9 Responses to “Not all accountants are created equal (how do you choose an accountant)”

1. Dennis Howlett
   http://www.accmanpro.com
   
   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…

2. Jason Holden
   http://www.holdenassociates.co.uk
   
   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?

3. Dennis Howlett
   http://www.accmanpro.com
   
   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.

4. Jason Holden
   http://www.holdenassociates.co.uk
   
   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!

5. Jason Holden
   http://www.holdenassociates.co.uk
   
   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?

6. THE SMALL BUSINESS BLOG » Blog Archive » Business Advisor Accountant: Jason Holden
   http://www.sme-blog.com/?p=92
   
   Said on May 30th, 2006 at 11:08 am

   […] Not all accountants are created equal (how do you choose an accountant) […]

7. THE SMALL BUSINESS BLOG » Blog Archive » Selecting professional advisers to partner you
   http://www.sme-blog.com/?p=133
   
   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. […]

8. Diarmuid O'Donovan
   http://www.cpdwise.com
   
   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

9. Jason Holden
   http://www.holdenassociates.co.uk
   
   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.

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