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Accountant

[uh-koun-tnt]

An accountant is a practitioner of accountancy, which is the measurement, disclosure or provision of assurance about financial information that helps managers, investors, tax authorities and other decision makers make resource allocation decisions.

In many countries the designation accountant, or at least the more specific terms qualified accountant or professional accountant, is a certified accountancy and financial expert. Like other legally restricted professions including doctors and lawyers, different countries have their own training and examination systems to maintain the quality of qualified accountants in their jurisdictions. There are many professional bodies for accountants throughout the world.

Accountants originally worked only in public practice, i.e. professional accountancy firms, selling advice and services to other individuals and businesses. Today, in addition, many work within private corporations, the financial industry and various government bodies.

Accountancy qualifications and regulation

The requirements for entry in the profession of accounting vary from country to country.

Accountants may be licensed by a variety of organizations, and are recognized by titles such as Chartered Certified Accountant, Chartered Accountant, Certified Public Accountant, Certified Management Accountant, Certified General Accountant and Certified Practicing Accountant. Many countries recognize two or more accounting bodies. There is, however, no legal requirement for an accountant to be a paid-up member of one of the many Institutes and other bodies which are effectively a form of professional trade union. Unlike the Law Society, which can legally stop a solicitor from practicing, accountancy institutes do not have such authority. Generally, certain specialized areas of accountancy such as auditing and insolvency are tightly regulated.

The Certified Management Accountant (CMA) designation is unusual in the United States in that it does not have a statutory basis. However, it is accepted by industry and by its peer associations. In Canada the Canadian CMA designation is recognised under provincial/territorial legislation.

Commonwealth of Nations & Ireland

In the United Kingdom, Canada, Australia and several other Commonwealth of Nations countries, the equivalents of Certified Public Accountant (CPA) include Chartered Certified Accountant (ACCA), Chartered Accountant (CA or ACA), Chartered Management Accountant, International Accountant, Certified Public Accountant (CPA - Ireland and CPA - Hong Kong), Certified General Accountant (CGA - Canada), and Certified Practicing Accountant (CPA - Australia).

United Kingdom

In the UK, there are no license requirements for an individual to describe himself/herself or practice as an accountant (except in the areas of audit or insolvency) but to use certain titles requires membership of one of the many appropriate professional bodies.

A Chartered Certified Accountant must be a member of the Association of Chartered Certified Accountants (designatory letters ACCA or FCCA).

A Chartered Accountant must be a member of one of the following:

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)
a recognised equivalent body from another Commonwealth country (designatory letters being CA (name of country) e.g. CA (Canada))

A Chartered Management Accountant must be a member of the Chartered Institute of Management Accountants (designatory letters ACMA or FCMA).

A Chartered Public Finance Accountant must be a member of the Chartered Institute of Public Finance and Accountancy (designatory letters CPFA).

An International Accountant must be a member of the Association of International Accountants (designatory letters AIAA or FAIA).

An Incorporated Financial Accountant must be a member of the Institute of Financial Accountants (designatory letters AFA or FFA).

Each of these bodies admits members only after passing examinations and undergoing a period of relevant work experience. Once admitted members are expected to comply with ethical guidelines and gain appropriate professional experience.

Chartered Certified, Chartered, International, and Incorporated Financial Accountants engaging in practice (i.e. selling services to the public rather than acting as an employee) must gain a "practicing certificate" by meeting further requirements such as purchasing adequate insurance and undergoing inspections.

Chartered Accountants may also become Registered Auditors in accordance with the Companies Act, providing they can demonstrate the necessary professional ability in that area and submit to regular inspection. It is illegal for any individual or firm that is not a Registered Auditor to perform a company audit.

Further restrictions apply to accountants who carry out insolvency work.

In addition to the bodies above, the Association of Accounting Technicians offers its members training and support in accountancy skills.

Canada

In Canada, there are three recognized accounting bodies: the Canadian Institute of Chartered Accountants (CA) and the provincial and territorial CA Institutes, the Certified General Accountants Association of Canada (CGA), and the Society of Management Accountants of Canada, also known as the Certified Management Accountants (CMA). CA and CGA were created by Acts of Parliament in 1902 and 1913 respectively and CMA was established in 1920.

The CA program focuses on public accounting and candidates must obtain auditing experience from public accounting firms; the CGA program takes a general approach allowing candidates to focus in their own financial career choices; the CMA program focuses in management accounting. The CA and CMA programs require a candidate to obtain a degree as a program entry requirement. The CGA program requires a degree as an exit requirement prior to certification.

Auditing and Public Accounting are regulated by the provinces. Historically, only CAs can perform audits in Ontario. In 2004, the provincial government of Ontario passed a new Public Accounting Act that would allow qualified CGAs and CMAs to perform audits, conditional on their organizations being able to demonstrate that their qualification and regulatory programs are equivalent in rigour to that of the CA program. As of March 2006, this process of evaluation had not yet begun. In Quebec as well, CAs still have exclusive public company audit rights by statute. In British Columbia and Prince Edward Island, CAs and CGAs have equal status regarding public accounting and auditing; In the rest of Canada, CAs, CGAs, and CMAs are considered equivalents pursuant to provincial and territorial legislation.

As of year 2006, the Chartered Certified Accountant (ACCA or FCCA) is also recognized by Canadian government as an eligible qualification to audit federal government institutions in Canada. Furthermore, The Canadian branch of ACCA is pursuing recognition for statutory audit purposes in the province of Ontario under the province's Public Accounting Act of 2004.

Australia

In Australia there are four main local professional accountancy bodies.

Certified Practicing Accountants (CPA) are members of CPA Australia.
Professional National Accountants (PNA) and Member of National Institute of Accountants (MNIA) are members of National Institute of Accountants Australia.

Chartered Accountants are members of the Institute of Chartered Accountants in Australia.

However, the Chartered Certified Accountant (ACCA or FCCA) qualification is also recognized as a prescribed body for insolvency purposes under the Corporation Act 2001, section 1282 and for audit purposes by ASIC under Practice Statement 180 Auditor recognition in Australia.

Additionally the Institute of Certified Management Accountants (ICMA) awards the CMA designation, and is specialized in the area of Management Accounting.

New Zealand

In New Zealand, there is only one local accountancy body, the New Zealand Institute of Chartered Accountants (NZICA).

To audit public companies an individual must be a member of either the NZICA or an otherwise gazetted body. Chartered Certified Accountant (Association of Chartered Certified Accountants or FCCA) qualification has also been gazetted under the relevant act (Under Section 199 of the Companies Act 1993: Qualifications of Auditors). An ACCA member can practice as long as they hold an ACCA public practice certificate (with audit qualification) in their country of origin.

United States of America

In the United States, legally practicing accountants are Certified Public Accountants (CPAs), and other non-statutory accountants are Certified Internal Auditors (CIAs), Certified Management Accountants (CMAs) and Accredited Business Accountants (ABAs). The difference between these certifications is primarily the legal status and the types of services provided, although individuals may earn more than one certification. Additionally, much accounting work is performed by uncertified individuals, who may be working under the supervision of a certified accountant.

A CPA is licensed by the state of his/her residence to provide auditing services to the public, although most CPA firms also offer accounting, tax, litigation support, and other financial advisory services. The requirements for receiving the CPA license varies from state to state, although the passage of the Uniform Certified Public Accountant examination is required by all states. This examination is designed and graded by the American Institute of Certified Public Accountants.

A CIA is granted a certificate from the Institute of Internal Auditors (IIA), provided that the candidate passed a rigorous examination of four parts. A CIA mostly provides his/her services directly to his/her employer rather than the public.

A CMA is granted a certificate from the Institute of Management Accountants (IMA), provided that the candidate passed a rigorous examination of four parts and meet the practical experience requirement from the IMA. A CMA mostly provides his/her services directly to his/her employers rather than the public. A CMA can also provide his services to the public, but to an extent much lesser than that of a CPA.

An ABA is granted accreditation from the Accreditation Council for Accountancy and Taxation (ACAT), provided that the candidate passed the eight-hour Comprehensive Examination for Accreditation in Accounting which tests proficiency in financial accounting, reporting, statement preparation, taxation, business consulting services, business law, and ethics. An ABA specializes in the needs of small-to-mid-size businesses and in financial services to individuals and families. In states where use of the word "accountant” is not permitted by non state licensed individuals, the practitioner may use Accredited Business adviser.

The United States Department of Labor's Bureau of Labor Statistics estimates that there are about one million persons employed as accountants and auditors in the U.S.

U.S. tax law grants accountants a limited form of accountant-client privilege.

Hong Kong SAR

In Hong Kong, the accountancy industry is regulated by the HKICPA under the Professional Accountants Ordinance (Chapter 50, Laws of Hong Kong). The Auditing industry for limited companies is regulated under the Companies Ordinance (Chapter 32, Laws of Hong Kong), and other Ordinances such as the Securities and Futures Ordinance, the Listing Rules, etc.

Austria

In Austria the accountancy profession is regulated by the Bilanzbuchhaltungsgesetz 2006 (BibuG - Management Accountancy Law).

Portugal

In Portugal, to be a qualified accountant or auditor, having an academic degree is obligatory, and the certification is exclusively awarded by the Ordem dos Revisores Oficiais de Contas (OROC), a professional organization. In general, accountants or auditors accredited by the Ordem dos Revisores Oficiais de Contas are individuals with university graduation diplomas in business management, economics, mathematics and even law, who after further studies, applied for an exam at the Ordem dos Revisores Oficiais de Contas and received the certification to be a ROC (Revisor Oficial de Contas), the highest professional qualification in the field of accountancy. Any citizen having a polytechnic degree as accounting technician is also entitled to apply for the exam and certification at the OROC.