Analysis of CPA and ICAA Accounting Bodies and Their Membership Benefits to a Student - Case Study Example

organisation name analysis of CPA and ICAA accounting bodies and their membership benefits to a student Name of the person who authorised the report Name and designation of the writer Name of the person to whom the report is submitted Date of submission Abstract A student in Australia is presented with 3 options when it comes to joining an accounting body. Two of these bodies enjoy more prominence in terms of benefits of membership and recognition: the Certified Practising Accountants of Australia and the Institute of Chartered Accountants of Australia. Membership to Certified Practising Accountants of Australia offers superior recognition internationally and has a benefits package that best suits a student, but the membership fees are quite high and entry requirements more stringent. Continuous educational requirements are the same for both accounting bodies. Table of Contents Letter of Transmittal 4 Accounting Bodies in Australia 5 A comparison of ICAA and CPA 5 Background 5 Membership Requirements 7 Costs 8 Benefits 9 Conclusions 11 Reference List 12 Letter of Transmittal [Recipient] [Title] [Recipient Department] [Address] Dear [Recipient]: We are pleased to submit the report on the analysis of CPA and ICAA accounting bodies and their membership benefits to a student. This report is of the two accounting bodies as of the year 2011. Sincerely, _____________________ Accounting Bodies in Australia There are three accounting bodies in Australia: Certified Practising Accountants (CPA) of Australia, the Institute of Public Accountants (IPA) and the Institute of Chartered Accountants of Australia (ICAA). Despite enjoying the same legislative recognition in Australia, two of these bodies, CPA and ICAA, enjoy more prominence due to their larger membership base and more extensive mutual recognition agreements with other foreign accounting bodies. A student is thus confronted with the task of choosing the best accounting body to join in order to further their career aspirations; a decision that may be impacted by the various membership qualifications imposed on aspiring members by the accounting bodies. Most students seek to gain membership to these accounting bodies by the virtue of holding an accounting degree, an accounting diploma, a non-accounting degree that has a business major, or by the virtue of having relevant accounting experience. This report seeks to explore the various options at the disposal of a student seeking membership to an accounting body in Australia and identify the best accounting body to join between ICAA and CPA. A comparison of ICAA and CPA Background The Institute of Chartered Accountants in Australia has been in existence for the last 83 years, after its constitution in 1928. Operating under a supplemental Royal Charter granted on behalf of Queen Elizabeth II by the Governor-General in 2005, the institute has a seven-elected-member Board of Directors, with an additional four board members who are appointed. The elected board members are elected by Chartered Accountants and the board in turn elects the President and Deputy President (The Institute of Chartered Accountants in Australia, 2010a). The organization has a membership of more than 67,000, 55,000 of whom are Chartered Accountants and 12,000 are accounting graduates. The Institute takes upon itself to investigate complaints levelled against its members and to take any warranted disciplinary action. The Institute of Chartered Accountants in Australia (2010a) states its objectives: "We aim to lead the profession by delivering visionary leadership projects, setting the benchmark for the highest ethical, professional and educational standards and enhancing and promoting the Chartered Accountant brand. We also represent the interests of members to government, industry, academia and the general public by actively engaging our membership and local and international bodies on public policy, government legislation and regulatory issues." A similar organizational structure is evident in CPA. It has a Board of Directors which acts as the governing body of CPA Australia and independently oversees the management. In parallels to ICAA, the board appoints the president and the deputy presidents (CPA, 2011a). CPA Australia prides itself as being among the world's largest accounting bodies. It has managed to garner a membership that tops the 132,000 mark globally (CPA, 2011b). The accounting body ensures the provisions of training, education, technical support and advocacy. It acts as a link between its members and local and international bodies, representing them to governments, academia, industries, regulators and the public (CPA 2011b). The aims and objectives of the CPA (2011b) are stated thus: 'Operating as a globally branded organization; being the global professional accountancy designation for strategic business leaders; engaging with employers; meeting members' knowledge needs, and branding CPA Australia as an even stronger competitor in the global marketplace.' Membership Requirements Different membership paths are available for the two accounting bodies. For membership to CPA, two level entry options are available. One is entry to the foundation level, while the other is entry at the professional level. The foundation level has eight segments and requires the candidate to have a solid grasp of accounting principles and practice that form the financial basis of an organization. These requirements are met on the completion of a recognized degree allowing you to start at the professional level (CPA, 2011c). Another pathway to CPA membership is through a series of exams for the assessment of technical accounting knowledge garnered on the field. These exams are tailored for you if you happen to have graduated with a non-accounting degree, from where membership starts with you as an Associate Member. Once done, you can start the professional level (CPA, 2011c). For the professional level, both educational and practical experience requirements have to be met. The educational requirement comprises six post-graduate education segments. These segments build on the foundation level by instilling governance, leadership and strategy in the professional. The syllabus at this level is industry-tailored. The practical experience at the professional level is garnered at the same time as the education component and ensures the candidate is well-rounded and ready to work. This level must be completed within a six-year period. Associate members must be holders of a bachelor's degree, or have a postgraduate qualification of at least 8 units, in order to advance to CPA status and gain full qualification as an accountant (CPA, 2011c). Membership to the ICAA can be achieved through the total completion of the Chartered Accountants Program, application for membership while being a member of an oversees accounting body recognized by ICAA, or by being an eligible teacher of accountancy. Partial completion of the Chartered Accountants Program is allowed in certain exemptions (The Institute of Chartered Accountants in Australia, 2010b). The program includes the Graduate Diploma in Chartered Accounting (or GradDipCA) which comprises of five study modules and three years of practical experience. The Program is open to graduates who hold an accounting degree and those who hold a non-accounting degree that is business-related and has an accounting major. In addition, those with unrelated degrees can take the accredited Graduate Conversion course, take an entry exam, or possess a Graduate Certificate of Chartered Accounting Foundations awarded by Deakin University. The three-year experience must be garnered in an organization that enjoys the recognition of ICAA, recorded with an ICAA mentor and must run concurrently with the GradDipCA at a weekly rate of 17.5 hours. Application for full membership can then be made after fulfilling these requirements (The Institute of Chartered Accountants in Australia, 2010b). Continued educational development is demanded by both bodies, with both ICAA and CPA asking for 120 hours dedicated to professional development every 3 years (The Institute of Chartered Accountants in Australia, 2010b; CPA, 2011c). Costs At the foundation level of CPA, each exam costs $495.00 in Australia, $495.00 in New Zealand and $295.00 for International enrolments. At the professional level, $785.00 per segment is payable by first closing date, $885.00 per segment by second closing date and an Exam deferral fee of $250.00 per segment (CPA, 2011d). Membership fees vary by the title, and on whether its membership renewal or it's a new membership. Renewal rates are $330 for an Associate who has been a member for less than six years, $599 for an Associate who has been a member for more than six years and $599 for a CPA/ FCPA. The rates for these memberships are slightly higher for members outside Australia. Retired members pay $120. New members must pay an assessment fee of $138, a first year membership fee of $330 for an Associate and a first year membership fee of $599 for CPA/FCPA (CPA, 2011d). For ICAA, the GradDipCA the per-module fee is $1,106 in Australia and $1,327 in Singapore/Malaysia. A supplementary exam fee of $579 in Australia and $579 in Singapore/Malaysia is payable, while the fee for late enrolment is $111 for the two regions. A subscription fee calculated and pro-rated according to the application month is payable at the time of application, in addition to the application fee of $32 if application is made within 3 months from the date of eligibility, or $521 if you apply more than 3 months after the date of eligibility. The current fees prorate from $790.90 in July 2010 to $65.91 in June 2011 for Australian residents. The rates are slightly lower for non-residents (The Institute of Chartered Accountants in Australia, 2010c). Benefits The ICAA is a founding member of the Global Accounting Alliance (GAA) and as the only accounting body represented in Australia, it offers the unique benefit of recognition by other GAA members (ICAA, 2010d). These include: The American Institute of Certified Public Accountants (AICPA); Canadian Institute of Chartered Accountants (CICA); Chartered Accountants Ireland (ICAI); New Zealand Institute of Chartered Accountants (NZICA); South African Institute of Chartered Accountants (SAICA); Institut der Wirtschaftsprüfer in Deutschland e.V. (IDW); The Japanese Institute of Certified Public Accountants (JICPA); Hong Kong Institute of Certified Public Accountants (HKICPA); Institute of Chartered Accountants of Scotland (ICAS); Institute of Chartered Accountants in England and Wales (ICAEW), and Institute of Chartered Accountants in Australia. Members can thus be recognized internationally through these affiliations and have accounting careers in these countries (GAA, 2011). Additional benefits include the provision of support services, training events and special offers on products from suppliers. A free subscription to Charter Magazine, access to the Online Knowledge Centre which houses over 80,000 books and 80 journals, and access to the community and institutional facilities for hire (ICAA, 2010d). CPA has recognition agreements with American Institute of Certified Public Accountants/National Association of State Boards of Accountancy(AICPA); Society of Management Accountants of Canada (CMA Canada); Certified General Accountants Association of Canada (CGA-Canada); Hong Kong Institute of Certified Public Accountants (HKICPA); Malaysian Institute of Accountants (MIA); Institute of Certified Public Accountants of Singapore (ICPAS); Chartered Institute of Public Finance and Accountancy (CIPFA); Chartered Institute of Management Accountants (CIMA); The Institute of Certified Public Accountants in Ireland (CPA Ireland), and Institute of Chartered Accountants of India (ICAI). Career options are thus open in these countries (CPA, 2011e). Additional membership benefits include those afforded by the Member Benefits+. This is a business partner program of CPA Australia and it offers special offers on products and services that have been negotiated for members such as health insurance, home loans, credit cards, life insurance and publications. CPA also links graduates with the industry by assisting them to find internships and jobs (CPA, 2011e). Conclusion Both CPA and ICAA have a rich history behind them and they have similar governance. The costs for CPA membership are generally prohibitive and their entry requirements more stringent as compared to ICAA. Both accounting bodies enjoy international recognition through mutual recognition agreements with other accounting bodies outside Australia, but CPA has a broad portfolio in terms of recognition agreements. It is thus more recognized internationally compared to ICAA. CPA also has better student guidance and assistance programs than ICAA. It is therefore of more advantage for a student to join CPA, despite the high cost and stringent entry requirements. Reference List CPA, 2011a. Our directors. [online] Available at: [Accessed 6 May 2011]. ---, 2011b. About us. [online] Available at: [Accessed 6 May 2011]. ---, 2011c. Information for academics about CPA Program and membership pathways. [online] Available at: [Accessed 6 May 2011]. ---, 2011d. Membership fees. [online] Available at: [Accessed 6 May 2011]. ---, 2011e. Where CPA Can Take You. [online] Available at: [Accessed 6 May 2011]. GAA, 2011. Aliance Members. [online] Available at: [Accessed 6 May 2011]. The Institute of Chartered Accountants in Australia, 2010a. Who we are and what we do. [online] Available at: [Accessed 6 May 2011]. ---, 2010b. The Chartered Accountants Program. [online] Available at: [Accessed 6 May 2011]. ---, 2010c. Cost of the Program. [online] Available at: [Accessed 6 May 2011]. ---, 2010d. Become a Chartered Accountant for a rewarding career. [online] Available at: [Accessed 6 May 2011]. Read More