what's the difference between an accountant and a chartered accountant?

Question

I have an accountant at the moment, he's a chartered accountant. I'm thinking of changing. My accountant is lovely but I just cant take much in that he tells me, it goes in one ear and out the other, nothings simple and straight talking. I have been talking with another guy that really knows his stuff, and talks in my language, I've learnt so much and had some brilliant advice from him, even found out that our business will need to be audited (if thats the right term) and our company will have to pay for it, Ive never heard of an audit before now. Only he's not a chartered accountant, does that make any difference in the world of the tax man?

Veritas - you are spot on.... I am very unexperienced with managing a company. We have only been set up 7 months. It is a Limited company, myself and partner have an equal sharehold. Thats why I feel I need to be able to understand my accountant, because I hate feeling vulnerable. The audit thing was because we have almost 5 million turnover within 7 months, so it looks like its a probability we'd have an audit, not sure if thats true, like I said, Ive never heard of audit before. Not sure what it will cost neither. But as for simple things like the tax implications on taking out dividends etc, when I ask my accountant, I cant take in what he says, like you, he uses terms that I cant understand ie oxym something? Thats not even in my queens english dictionary :-)
So to refrase my question. Being so new to managing a business, should I go with the accountant that I understand more clearly ? or mine that I dont? but trust him to get me through because he is more qualified.

Answer 1

I think that you need to be careful, you seem to be very inexperienced. If you are a sole trader, ie, not a Limited Company, then you do not need an annual statutory audit carrying out on your business. Public Limited Companies, do require an Annual Statutory Audit and the majority of non-PLC Limited Companies will require an Annual Audit, but there are exceptions.

Lets be clear though, an Audit is not technically the same thing as a firm of Accountants keeping your financial books for you, including perhaps, preparation of annual accounts, 'Tax Return', and 'VAT' returns'. It is not brilliant advice to be told that a business needs an Audit, if that is true in your case. That is very basic. I suspect that the term Audit has been used very loosely, and what is really meant is, assistance with accounting records.
Again, any properly qualified accountant, would have known about the Audit requirement without having to find out, as you put it. Remember, Accountants will only do what you engage them to do.

Your headline question is an oxymoron and betrays a lack of knowledge on your part. This lack of knowledge could be exploited.

A Chartered Accountant, IS an Accountant. Those who are in 'Public Practice' will have been approved by their Professional Body, in this case, the ICAEW to carry out Statutory Audits and other Accounting Services. Moreover, members of the Association of Chartered Certified Accountants, whose professional body is the ACCA, may also, if aproved by their professional body, act in the same way as the ICAEW.
There are two other approved accountancy bodies, but you don't need to concern yourself with them.

As far as the Customs & Revenue (tax man) are concerned, they don't particularly care who actualy completes your tax return, because you remain responsible for the accuracy of the figures. It is possible, however, that if a firm of Accountants with a recognised qualification carries out the work, you may be subject to less hassle and enquiry. Because they may feel more confident with their work.

As I said before, you sound very inexperienced and easily impressed. How do you know, therefore, that your (other man) knows what he is talking about? You tell us very little about your business, what its legal status is, or what accounting work you want carrying out. Nor do you say what, if any, are the qualifications of your 'other man'. We know he isn't a Chartered Accountant, but we don't know if he is a member of any recognised Accountancy body, and if he is, whether he has been authorised to carry out the work you require.

Again, with your current accountant, who is properly qualified, you don't say what it is that you don't understand, do YOU need to understand it, what work is he doing for you? I have just noted that you have used the word -WE- when referring to your business, that means it could be a partnership. The partnership agreement might call for an annual audit. One thing is for sure, your Chartered Accountant will know what he is doing, and you would have recourse to his professional body if he doesn't. Your other man is an unknown, who may simply be exploiting your ignorence.

Answer 2

Chartered Accountant Definition

Answer 3

Any one who wishes to claim they are an accountant may do so. However a Chartered Accountant (CA) is the title used by members of a certain professional accountancy associations in the British Commonwealth countries and Ireland. The term chartered comes from the Royal Charter granted to the world's first professional body of accountants upon their establishment in 1854.

Answer 4

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There are two registered types of accountants dependent on their qaulifications A chartered Accountant is the highest and most qualified and are governed by the Institute of Chartered Accountants Certified are the next in line and are memebers of the Certified Accountancy Then there are people who call themselves accountants who can do all what the above do but do not necessarily hold all of the qualifications That is the only difference

Answer 5

if he's not a chartered accountant, for a start, he can't do the audit. Only a CA can sign up for the (additional) ticket needed to do audits.

"Chartered" means he met the standards to join his Instution, which means he's a trained professional. Not chartered means you can't rely on him alone, though if you can afford both that might be the best mix. On the other hand your non chartered friend might be a smooth-talking busker, and you might be best getting rid of him. Beware and move SLOWLY in this matter. Charlatans usually reveal themselves over time.

All accountants have a problem communicating what they mean to humans. This can be remedied partly by a trip to your local bookshop ("Accounts Demystified" is the one that worked for me) and partly by placing your hand on his forearm while he's holding a pencil, and starting a sentence with the word "Look...".

So I vote for keeping your CA but beating him into shape. A non-C A is too big a risk.

The tax man (and worse: the VAT man) doesn't care who advises you, but he does care if you break the law. Unfortunately the law is fiendishly complicated. You need a serious professional with you.

Answer 6

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RE:
what's the difference between an accountant and a chartered accountant?
I have an accountant at the moment, he's a chartered accountant. I'm thinking of changing. My accountant is lovely but I just cant take much in that he tells me, it goes in one ear and out the other, nothings simple and straight talking. I have been talking with another guy that really...

Answer 7

use both of them- use the non chartered for you normal business needs since he knows what he is doing then you take the books that are filled in properly by your accountant to the chartered one for it's final audit since there is less for him to do it will be cheaper for you than using the chartered for everything - in most chartered accountants offices they will charge you the full chartered rate but get an accountant to do tidy up the books before the chartered accountant looks it over but they charge you as if the chartered accountant did all the work

Answer 8

a chartered accountant has taken additional qualifications, which places them at the top of their profession...

which is why you pay more for them...

Answer 9

Accountant = Dumb
Chartered Accountant = Dumber

Answer 10

about thirty quid an hour