Qualifications to become an accountant in the UK - Case Study Example

Introduction Accountants are necessary in almost all types of businesses in the UK. These may multinational ones or smaller ones that only focus on aparticular region. Graduates have the option of joining a specialised accountancy firm or working for a general organisation in need of accounting services. The accounting sector has revolutionised from what it was some decades ago. With the introduction of the internet and the popularisation of e-commerce, there is a need to incorporate some versatility in this profession. Gone are the days when accounting was thought to be something that involved numbers only. These days, accountants are required to be more analytical than technical. (British Expats, 2007) Qualifications to become an accountant in the UK There are four major qualifications for chartered accountants in the United Kingdom. These are as follows; The Institute of Chartered Accountants in England & Wales (ICAEW) (designatory letters ACA or FCA) The Institute of Chartered Accountants of Scotland (ICAS) (designatory letters CA) The Institute of Chartered Accountants in Ireland (ICAI) (which is a UK body that operates in Northern Ireland, designatory letters ACA or FCA The Association of Chartered Certified Accountants (ACCA) Requirements needed to get the various qualifications Institute of Chartered Accountants in England & Wales (ICAEW) The Institute of Chartered Accountants in England & Wales (ICAEW) is the largest accountancy body in Europe. It is seen as a body that yields financial qualifications of a reputable level. The ICAEW has about one hundred and twenty seven thousand members where twenty [percent of these members happen work and live ion regions falling outside the United Kingdom. This qualification is really relevant because it equips individuals with the ability to work in diverse areas of business. (ACCA, 2008) In order to enrol for an ICAEW qualification, a student needs to be above eighteen years of age. On top of this, they are required to have passes in GCSE and A-level. For the latter case, they should have two of those passes but for the former, they are required to have passes in 3 subjects. This must include English and mathematics. However, there may be exceptions for this, if a student has enrolled for AAT-ACA. This is a fast track course that facilitates students who plan on enrolling for ICAEW qualifications. Sometimes some international students may not have some of the above named requirements but if they have completed bachelor degrees then they may be allowed to join. Besides this, the main exemptions that exist for these particular qualifications are those students who have passed CIMA exams, ACCA finalists. This is something that has to be confirmed from the ICAEW centre. Also, candidates who have passed some of the exams in the professional stage of the qualifications may obtain credits for this. For the points required to enter this accounting qualification; candidates must have a minimum of two hundred and twenty tariff points in UCAS or in general, they can have eighteen points. Besides this, for those entering using the avenue of degrees, the requirement is that candidates should have a first degree. Exams are normally conducted in two stages. The first is called the professional stage. In this stage, individuals are required to do twelve exams. These exams are normally conducted through computers and on average most of them last for one and a half hours. Candidates are expected to do application based modules. Examples of subjects covered in this area of study include; taxation, financial reporting, business management, business finance, audit assurance and accounting. These are subjects that are normally based on company law,. These are supposed to be six in number and normally take up about two and a half hours on average. The second stage of the exams is called the advanced stage. In this latter case, candidates are required to do two exams and are also expected to do one case study. Some of the topics to be taken in this stage include; performance management, change management, corporate restructuring, start up, financial strategy, insolvency and business management. The case study exam normally takes four hours while the technical exams are done in two sets. (Mouck, 1995) In order to become professionally qualified, candidates will be required to back up their theoretical knowledge with some levels of training. This will normally involve registration with an employer who maybe authorised. On the other hand, training can also be conducted independently by specific candidates. The training is normally supposed o be conducted for a period of four hundred and fifty days. This work experience must gain approval from the ICAEW through their employer. It should be noted that some employers may not necessarily be the right ones for that particular course therefore care must be taken when trying to secure training so as to get the most relevant employer. This must be an employer who has the right environment and one who deals directly with a candidate's area of interest. In order to apply for membership into the Institute of Chartered Accountants in England and Wales, individuals are required to be in their final year of training and this is just before they can sit for the exams in advanced case studies. On top of this, individuals are required to have completed the earlier devolved assessments before doing their exams in the advanced stage category. Institute of Chartered Accountants of Scotland (ICAS) In order to enter into the program, students are required to have sat for A-level. They need to have done English and mathematics. However, certain employers may require different subjects so individuals should consult their employers. Some need to have obtained AAT qualification, another exception is a degree obtained from the United Kingdom. Lastly, individuals are required to have obtained a training contract from their employer. This employer must have received approval form the ICAS training office (British Council, 2008) In order to qualify to become a chartered accountant, a student needs to pass or do well in all the stipulated exams. The ICAS exams normally test the following abilities professional expertise professional skills competence In the competence sector, a student is required to do five subjects. These include; business law, finance, business management, principles of auditing and reporting and financial accounting. Under the professional skills area, students are required to do four subjects that include taxation, advanced finance, assurance and business systems and financial reporting. Lastly, in the professional expertise area, individuals are required to do one case study that covers multiple disciples in accounting. Thereafter, a student is required to have completed training from an approved employer for a period of roughly three years. (Smith & Manes R, 1965) Association of Chartered Certified Accountants (ACCA) Before a student can be allowed to do ACCA, they are required to be eighteen years and over. Besides this, they should have sat for A-level where they need pass in 2 subjects. On top of this, they are also required to have done well in three GCSE subjects making it a total of five subjects. The five subjects must include English and Mathematics. Other avenues that students can use to get into the program include having completed a CAT course on which they completed level B. Alternatively, students could have done an AAT course in any country found in the United Kingdom. This is usually an intermediate course. Sometimes students may be allowed to join the program if they have completed a BTEC national Certificate exam in any subject. NVQ applicants are also allowed to join. International students who may have completed a degree form a recognised university or institution may also be allowed to become ACCA entrants. There may be some students who have earned a diploma in ACCA; this must also be from a recognised institution. The Diploma must be in either finance or accounting and must be complete. Lastly, there is still another exemption; some students who have passed the age of twenty one may be given the opportunity to apply for entry through mature entry scheme. (Association of Chartered Certified Accountants, 2008) In order to qualify to become an ACCA accountant, students are required to pass all the ACCA exams. The exams normally come in three phases; that is, part one, two and three. There is a stipulated time period when students are supposed to complete these exams. The maximum one can take to do them is ten years. Students are also supposed to do training for a minimum period of three years. This training must be supervised. The course structure is divided into three parts. In the first part, some of the subjects covered include managing people, financial information for management and preparing financial statements. In the second phase, some of the subjects covered include audit and internal review, financial reporting, financial management and control, business taxation, business law and information systems. In the third phase some of the subjects covered include strategic financial management, advanced corporate reporting, strategic business planning, business information management, performance management, advanced taxation and audit and assurance. Some of the subjects listed above are computer based while others my not. Institute of Chartered Accountants in Ireland This is also a recognised body in the accounting profession. The requirements for entry into this course include being eighteen years and over. Students are required to have two a level passes and three in GCSE. The other alternatives include having a degree from a recognised university. Students should also secure training from an ICAI approved employer. In order to qualify to become an accountant, there is a need for students to complete all the stipulated ICAI exams. This means that they must do this in the three phases presented in the exams. They must also back this up with three years training form a certified employer. Examples of subjects handled in their exam include taxation and company law. (ICAEW, 2008) Differences between Chartered accountancy qualifications and other accountancy qualifications in the United Kingdom The first difference between the CA qualified accountants and another qualification in accountancy is the amount of support provided during training for the entire length of training i.e. three years. This is because Chartered Accounting bodies normally require prospective employers to register with them. Consequently, those employers who gin approval by these CA bodies normally have all the requirements necessary to equip an individual with the right accounting practice to make it in the accounting world. (Smith & Manes R, 1965) Besides this, students are given the opportunity to take a break from training for a minimum of four weeks in each academic year. This means that students can be able to attend to other matters in their lives without necessarily terminating their training contract. Not only do chartered accountants get entitled to training leave, their fees are also paid by their prospective employers. This is because those employers consider them as a sort of investment and are willing to put in some finances to ensure returns on their investment, The results are normally seen though the good salary package that students receive after completing their training. Another reason why Chartered Accountancy qualifications are different from other accountancy qualifications is the fact that CA bodies normally have their representatives within certified organisations providing training. This means that those representatives are supposed to act as mentors to students conducting the training. They are supposed to ensure that students receive ample career guidance, get a role model and provide them with a network of opportunities. Because of these mentoring relationships, students are able to succeed in their career and can grow continuously. Certified Accountancy qualifications are also unique because they are quite strict with the administration of their exams. This is because most of these bodies normally administer examinations themselves. This is in contrast to other accounting qualifications that prefer outsourcing their examinations. Such an approach is crucial in that it allows students to become close to their accountancy body. They are able to understand all the requirements expected from them and will therefore endeavour to complete all components of the syllabus. It is also important to remember that chartered accountancy bodies normally give minimal exemptions to their exams. The same cannot be said of other accountancy qualifications. Other qualifications usually try to woo many students by giving numerous exemptions for exams. This can become very detrimental to the student because they may not complete or understand all the fundamentals of the course. Chartered accountancy bodies normally give exemptions after matching their syllabus details with those ones done on third level and if they are in unison, then they can give exceptions. The statistics speak for themselves; (Association of Chartered Certified Accountants, 2008) ACCA pas rate-59% ICIA pass rate-77% CIMA pass rate-39% As it can be seen the first two qualifications which fall under the Chartered Accountancy program have relatively higher pass rates than the latter CIMA qualifications. Therefore, if CA qualifications produce excellent theoretical knowledge and back it up with solid training, then it is a qualification that stands out form the rest. Another reason why chartered accountancy qualifications should be considered in relation to others is the fact that all of them have recognition in other parts of the world. In Australia and New Zealand, Chartered accountancy bodies have entered into agreement with bodies in those respective countries and therefore allow them to continue with their carer prospects. Other countries that recognise chartered accountants in the world are South Africa, Japan, India and many others. (Mayhew, 2004) Beside this, chartered accountancy qualifications allow students to have great mobility within their careers. The courses normally equip students with the knowledge and capability to become business advisors. This means that they can be able to make decisions concerning business strategies. They can also affect the profit levels in their respective companies and give tips on how to increase market share. These qualifications also equip students with the knowledge required to create their own business i.e. they are taught entrepreneur skills. This is all because such students normally have enough solid backing in the area of marketing or economics. This is normally backed up by the kind of rewords that they receive. Most of tem are given salaries that start from forty thousand pounds onwards. If they are aggressive, they can increase that amount to something else. Demand for Charted Accountancy qualifications in the United Kingdom There are numerous companies that are strict about the admission of chartered accountants. Some of the jobs that are open for these chartered accountants include some in the public sector, others in the corporate sector and evening the private sector. Others have the option of going into the music industry and even health care. Last year, statistics show that about sixty five percent of the chartered accountants that work in the industry are chartered accountants. One can therefore deduce that if there are so many practising chartered accountants in the field, then there must be a lot of demand for them. Besides this, there is a lot of versatility for them. They are needed in numerous types of companies out there. (Mason, 2001) The kind of rewards that chartered accountants get paid are quite substantial; this is an indication that they are quite in demand. Most of the time, if a qualification is not recognised then very minimal amounts would be paid for it. But this is not the case for all other qualifications. Some accountants have to chase after employers in order to get in. Conclusion All in all, the accounting profession is one of the most versatile professions. This is because there are numerous firms that need services offered by these professionals. The UK recognises six accounting bodies that all fall under the CCAB However, the essay has focused on chartered accountants mainly. In order to choose between the four chartered accountancy bodies, individual must decide where they will work as all the qualifications are better suited for different working circumstances. These include ICIA, ICAS, ICAEW and ACCA. However, some firms are more flexible and may offer training for their employees. (Graduate Bureau, 2008) Reference: British Expats (2007): Equivalent qualifications, retrieved from http://britishexpats.com/forum/index.php accessed on 19th March 2008 Mayhew, K. (2004): The Economic and Distributional Implications of Current Policies on Accounting practices; Oxford Review of Economic Policy, 20, 298-314 The Institute of Chartered Accountants in England and Wales (2008): The Professional qualification, retrieved from http://www.icaew.org.uk/students/prospective/postgrad.cfm accessed on 19th March 2008 Association of Chartered Certified Accountants (2008): How do l become an accountant', retrieved from http://uk.accaglobal.com/uk/join/schoolleavers/how accessed on 19th March 2008 ACA (2008): Key facts and trends in the UK Accountancy Profession, a report for the Association of Chartered Accountants Smith, V. & Manes R. (1965): Economic Joint Cost Theory and Accounting Practice, a journal for the accounting review, Issue No. 1, Volume No. 40, pp 31-35 British Council (2008): Accountancy qualifications in the UK, retrieved from http://www.britishcouncil.org/learning-infosheets-accountancy.pdf accessed on 19th March 2008 Mouck, T. (1995): Irving Fisher and the mechanistic character twentieth century accounting thought; a journal for Accounting Historians Graduate Bureau (2008): Graduate Accountancy jobs; retrieved from http://www.grb.uk.com/accountancy_jobs.0.html accessed on 19th March 2008 Mason, G. (2001): The mix of graduate and Intermediate-level accounting skills in Britain; Journal of Education and work, 4(1), 5 Read More