Accountancy and book-keeping

Accountants are more highly qualified than book-keepers, and will generally manage, interpret and advise on accounts while the latter simply keep them. They may also be licensed to carry out more functions, like auditing, and may specialise in a particular accounting area:

• public accounting involves the accounting for money raised and spent by government and its departments and agencies
• financial accounting deals with the presentation of largely historical information, often to satisfy legal requirements, and will include the accounting reports of businesses
• management accounting presents accounts that are useful for business managers and that can be used to guide future decisions.

Accountancy may be defined as ‘the art of recording, classifying, and summarising in a significant manner and in terms of money, transactions and events which are, in part at least, of a financial character, and interpreting the results thereof’.

This definition introduces two of the basic concepts of modern accounting:

• ‘significant’ – means that only items or amounts that make a difference should be included
• ‘in terms of money’ – says that accounting can only consider items that have a monetary value.

Other ideas that are embodied in modern accounting include:

• accounting entity – a clear boundary around the area of economic activity
• period of account – records should be for a defined period and a statement should be at a specified date
• continuity of activity – assumes that the organisation will continue
• objectivity – impartial, independent and unbiased
• consistency – the same methods of accounting should be used over time
• conservatism – not over-optimistic
• disclosure – all relevant facts made public
• accruals – profit or loss should be allocated to the business area that made it
• matching – profit or loss shown in the same accounting period.

Accountancy and book-keeping in the Services

Each Service has its accountants and book-keepers, who are specialists in accounting, and many of whom gain professional qualifications in the field. However, many other Service people deal with accounts as part of their duties. Supervisors of bars and messes, treasurers of sports and adventurous training clubs, managers of non-public facilities and the like may be responsible for assets and cash that add up to a tidy sum. They may not have formal training and letters after their name but they are certainly involved in the field.

Accounting is a recognised and valued skill that can open the door to a number of second careers, either as a full-time occupation or combined with other responsibilities. It can be mastered at a distance while in an unrelated career. It is therefore an ideal subject for in-Service personal development.

Qualifications and training

(The proposed merger of ICAEW, CIPFA and CIMA to create a new institute with 200,000 members has been narrowly rejected by the Institutes.)

The Institute of Chartered Accountants in England and Wales

The ICAEW has 124,000 members working in business and public practice in 142 different countries. More than 15,000 members live and work outside the UK, and the Institute also has 9,000 students. Its members are employed in industry, finance, commerce and public practice. The range of professional activities carried out by Chartered Accountants includes auditing, financial reporting, taxation, personal finance, corporate finance, financial management and information technology.

People wishing to qualify as a member of the ICAEW have to pass two sets of exams (nine papers and two assessments) through a period of approved training in an authorised office over three to five years, including work experience totalling 450 days. These offices may be public practices or commercial organisations in which the student will work in-house. Most students are graduates. However, it is possible to register as a student provided that you meet the minimum entry requirements of three GCSE passes and two A-levels.

Chartered Institute of Public Finance and Accountancy

CIPFA currently has more than 15,000 members and 2,500 students, and deals with accountancy and financial management in the public services. Chartered Public Finance Accountants influence decisions through financial management. They also assess the financial viability of proposals that influence services in a changing environment.

Its qualification system operates at four levels. Exemptions are available and qualifications may be gained through a mixture of academic study and work experience. It also offers CPD and diplomas for its graduates’ advanced training. Members work, often at the most senior levels, within public service bodies, in consultancy roles, in the national audit agencies and in major accountancy firms. They are respected throughout for their high technical and ethical standards, and professional integrity.

Association of Chartered Certified Accountants

ACCA is the world’s largest accountancy body, with 240,000 students and 105,000 members and students in 170 countries. Its qualification can open up a career in financial or management accountancy, and the Association has offices, centres and examination centres. Chartered Certified Accountants work throughout the financial sector in public practice, financial services, the health service, industry, commerce and the public sector.

It offers four core qualifications: at technician level, a professional scheme, a BSc in Applied Accounting, and an MBA to broaden business understanding and enhance strategic decision-making. It also has a range of further qualifications and a CPD scheme. It operates joint examination schemes in 21 countries and works closely with nearly 400 registered tuition providers and more than 6,500 employers.

Chartered Institute of Management Accountants

Chartered Management Accountants are professional accountants (over 80,000 students and 62,000 members in 155 countries) who apply their skills to enhance management decision-making. They are able to give financial matters a commercial focus, equally important for the executive chairman of an international group or a junior project analyst.

The CIMA qualification takes students through three stages. At first, the emphasis is on basic accounting and management principles, then it moves into subjects like financial accounting and information technology, before concentrating on business and management topics at foundation, intermediate and final levels. Three years’ relevant practical experience is required before achieving full membership.

The Association of Accounting Technicians

The AAT is the professional body for Accounting Technicians, with more than 100,000 fellows, members and students worldwide. It provides a recognised qualification and membership body for accounting staff at technician level. It is sponsored by other accounting bodies, and successful AAT students are exempt elements of their qualifications.

Accounting technicians work at all levels of finance, from accounts clerk to financial controller, in all industries and sectors, and in organisations large and small. They may be the only trained finance staff employed, or part of a balanced team. Some provide accounting services on a self-employed basis, providing an accountancy and taxation service, particularly to small and medium-sized enterprises.

Institute of Financial Accountants

The IFA is the world’s oldest non-chartered accountancy body and operates in over 80 countries worldwide. Financial accountants are employed in senior positions in industry, commerce and practice, taking an active role in the financial management of companies and operating mainly at board level.

Membership qualification takes the form of exams at Pre-professional, Associate and Fellow levels. A relevant qualification from another accountancy body may provide exemption from some, or even all, exams. IFA also assesses workplace competency profiles to grant exemptions on an individual basis.

International Association of Book-Keepers,

Book-keepers are the people who actually complete the books of accounts providing financial support to other professionals. The Association’s exams are offered in 80 countries. Many book-keepers are highly competent at accounting, and some are expert in specialist areas including:

• purchase accounting
• sales accounting and credit control
• accounting for stock
• cash and banking
• nominal ledger
• accounting for VAT
• payroll accounting
• data processing
• miscellaneous responsibilities.

The IAB has 8,000 students and members worldwide, while its syllabus operates at Levels 2, 3 and 4, with exemptions considered for holders of other accountancy qualifications. It also offers a number of other linked qualifications.

Association of International Accountants

The AIA is a UK statutorily recognised qualifying body for company auditors. It was founded in 1928, and promotes and supports the advancement of the accountancy profession both in the UK and internationally. It has members and students in over 85 countries. The qualification requires three years’ accountancy experience in addition to successfully completing the examinations at Foundation, Professional 1 and Professional 2 levels.

Students must be 18 years or over and hold a minimum of two A-level passes and three GCSE passes, including English and maths or equivalent, or a mature student over 21 with three years’ accountancy experience.

Accountancy degrees

The Universities and Colleges Admissions Service (UCAS) holds details of accountancy courses in British institutions.

Employment

Employment in accountancy and book-keeping varies enormously, from finance director of a large multinational to part-time book-keeper working from home on the accounts of a few small, local businesses. There are opportunities in public service and in private business, in public practice and in-house.

Contact details

Institute of Chartered Accountants in England and Wales, Learning and Professional Development, Gloucester House, 399 Silbury Boulevard, Central Milton Keynes MK9 2HL Tel: 01908 248040 Website: www.icaew.co.uk

Chartered Institute of Public Finance and Accountancy, 3 Robert Street, London WC2N 6RL Tel: 020 7543 5700 Website: www.cipfa.org.uk

Association of Chartered Certified Accountants, 2 Central Quay, 89 Hydepark Street, Glasgow G3 8BW Tel: 0141 582 2000 Website: www.accaglobal.com

Chartered Institute of Management Accountants, 26 Chapter Street, London SW1P 4NP Tel: 020 7663 5441 Website: www.cimaglobal.com

Association of Accounting Technicians, 154 Clerkenwell Road, London EC1R 5AD Tel: 020 7415 7500 Website: www.aat.co.uk

Institute of Financial Accountants, Burford House, 44 London Road, Sevenoaks, Kent TN13 1AS Tel: 01732 458080 Website: www.ifa.org.uk

International Association of Book-Keepers, Burford House, 44 London Road, Sevenoaks, Kent TN13 1AS Tel: 01732 458080 Website: www.iab.org.uk

Association of International Accountants, South Bank Building, Kingsway, Team Valley, Newcastle upon Tyne NE11 0JS Tel: 0191 482 4409 Website: www.aia.org.uk

Customer Service Unit, Universities and Colleges Admissions Service, PO Box 28, Cheltenham, Gloucestershire GL52 3LZ Tel: 0870 1122211 Website: www.ucas.com