Firstly, you’ve probably guessed by now that we love accountancy, it’s our thing! But we also love helping businesses no matter their size, learn and understand about what we do and how we do it, so they’re able to make more informed choices that drive business growth. You may have looked around and seen various labels accountants use and may be wondering “what is a chartered accountant?”
This is an area we often find there is confusion about, and people often wonder what type of accountant should they use. Read on to find out more about the different types of accountants and how they can help.
CPA or CA?
It’s not a typo – accountants love an acronym, and this is no different! Here in Australia, there are two types of accountants – Certified Practicing Accountants & Chartered Accountants.
Let’s take a quick look at both.
Certified Practicing Accountants (CPAs)
A CPA holds an undergraduate degree in accountancy which is accredited by CPA Australia. To qualify as a CPA, they also have to complete the CPA program, which involves postgraduate study and a commit to continuing professional development. Additionally, in order to practice, they must also pass the CPA’s public practice program.
Chartered Accountants (CA)
Chartered Accountants are members of the Institute of Chartered Accountants (ICAA). After their university degree, they continue their study with the postgraduate CA program. Following that they complete three years of industry experience and participate in 120 hours of professional development every three years.
The ICAA upholds the highest standard of accounting practice and enforces a strict code of ethics. All Chartered Accountants – there are over 120,000 active members – must uphold this standard.
So, what’s the difference between an Accountant and Chartered Accountant?
The primary responsibility of an accountant is to record, analyse, interpret, and summarise financial transactions for decision making. Individuals, associations and businesses are just some examples.
Some of the functions of accountants include:
- Taking part in planning and budget meeting with individuals and corporate organisations to give recommendations.
- Making sure that financial practices are in accordance with state and federal laws.
- Balancing business accounts and preparing financial documents regularly or as requested.
- Preparing and paying tax returns.
- Recording information about account payables, profits, sales taxes, and other transactions in an organised way.
What is a chartered accountant?
Rather than solely concentrating on tax returns and other “real time” aspects (although they can do so), the focus of Chartered Accountants is to advise on ALL financial aspects of a company, and to work in more of a commercial capacity.
For example, if you own a business and you want to buy a smaller company, you’ll need the service of a Chartered Accountant. You’ll get the help you need to make an in-depth financial plan prior to the acquisition. In addition, they will guide you from the beginning to the end of the process, including how to fund the acquisition and advice on how to advance in a tax efficient way.
Reasons to consider using a Chartered Accountant
While using a Chartered Accountant is often triggered by a business reaching a certain size or experiencing a certain event, there are many reasons why using a Chartered Accountant could be right for you, such as:
Delivering advice you can rely on
Using a Chartered Accountant gives you the reassurance that the advice you are receiving is both accurate and informed. When it comes to your business’s finances, you need to know they are in safe hands. Chartered Accountants must ensure their knowledge and skills are always kept up to date.
A strong commitment to a ‘code of ethics’
Your accountant might be dealing with your personal and business finances, so you need to have confidence that they can be both trustworthy and discrete. Chartered Accountants are bound by a code of ethics to uphold a set of professional principles, endeavouring to always put their clients’ interests above their own. Practising means demonstrating a commitment to maintaining and developing professional standards, so you know your financial interests are always put first.
Providing your business with extra security
For any business owner, knowing that your money is in good hands is probably the most essential consideration in any decision. Because of the compliance rules and regulations that chartered accountants follow, it makes them the most secure accountants in the market. You can rely on them to provide your business a safety net in case something goes wrong with your finances.
Giving you more than just filing returns
Of course, you can use your accountant as much or as little as your own business demands – but if you need more than simply filing tax returns and keeping your records up to date, a trusted Chartered Accountant can help you to grow your business and manage your risk.
They can address all financial issues with accuracy to make sure that your problems are solved. Since they are regulated, they are required to take out professional indemnity insurance as well as undergoing periodical compliance to make sure that they are still meeting the set standards
And finally…
Accountants provide crucial services to businesses of all sizes and can play a pivotal role in fuelling business growth and ensuring compliance. Need help? Contact the POP Business team today on 1300 180 630 and let us show you how we can take your business to the next level.
