What is the Difference Between an Accountant and a Chartered Accountant?

What Does a Chartered Accountant Do?

To the general public, chartered and general accountants fall into the same category and provide conventional services like accurate financial statements and tax returns. Technically anyone with practical accounting experience or accreditation in the industry can call themselves an accountant. However, to the professional eye, chartered and general accountants have significant differences. Therefore, if you want to work with a financial expert, it is crucial to understand the difference to ensure you receive the best expertise for your needs. Linghams Chartered Accountants in Cardiff have a team of dedicated accountants that work closely with businesses. Some of the services they offer are business advice, tax planning and compliance, audit solutions, and support services.

What Is the Role of an Accountant?

An accountant, regardless of their qualification or licencing, provides ongoing records of financial transactions of businesses. They can work as sole traders who serve specific companies or offer consultancy services. Some of the roles of accountants include:

  • Preparing tax-related documents for individuals or companies and ensuring compliance with the tax regulations. The financial practices should also follow federal laws.
  • Corporate accountants analyse financial records and conduct a risk analysis to assist businesses in making the right investment decisions.
  • Preparing annual financial reports, budgets and reconciling financial statements to ensure the payables and receivables are appropriately recorded.
  • Accountants in investment planning should be conversant with the long and short-term business investment opportunities to help businesses grow.

What Is a Chartered Accountant?

Difference Between an Accountant and a Chartered AccountantIf you are looking for basic accounting services, a general accountant can provide the assistance you need. However, you need a professional with a specific baseline of experience under their belt for specialised or complicated financial services. A chartered accountant undergoes rigorous training to acquire the necessary certification. After completing an academic postgraduate programme and finishing a specific set of exams, they work under a mentor for three years before receiving the chartered status.

Chartered accountants are also members of professional bodies like ICAEW (Institute of Chartered Accountants in England and Wales). That means they adhere to a specific code of ethics. Most chartered accountants work from an accountancy firm or hold top positions in multinational firms, overseeing major financial decisions. Their expertise enables them to provide relevant advice on financial matters.

What Does a Chartered Accountant Do?

In addition to basic accounting practices, a chartered accountant provides specialised services in the following areas:

  • They generate reports that analyse the financial performance of a company. The financial records direct significant business decisions and strategies.
  • Most chartered accountants work in senior management positions as chief executive officers or finance managers. Hence, they steer companies in the right direction and seek new business opportunities to grow them to greater heights.
  • Providing consultancy services and are trusted advisors for companies during significant transitions and financial crises.
  • Conducting or planning for business audits, including random real-time auditing and double-checking financial statements and ledgers to improve accuracy.
  • Providing advice on day-to-day accounting activities like recording financial records, preparing corporate tax reports and creating plans for mergers and acquisitions.
  • Working with human resource managers alongside marketing and business operation managers to prepare budgets and discuss the business’s financial position concerning company goals.

The major difference between a chartered accountant and a general accountant is accreditation. While anyone with basic accounting experience can perform the role of an accountant, chartered accountants must undergo a series of examinations. After the rigorous training, they receive certification and become members of a professional body; either ICAEW or ACCA, with practical industry experience. Chartered accountants also have indemnity insurance in case unintentional errors occur during their practice.

Most accountants specialise in one aspect of accountancy like tax or payroll and may not give holistic financial advice. On the other hand, chartered accountants are experts in management, accounting and investments and can perform all the financial activities. They can also assist in budget planning, auditing and analysing investment opportunities.

When to Hire a Chartered Accountant

Accountants can offer general advice on tax matters and ledgers; hence, you don’t need a chartered accountant for VAT issues and payroll matters. However, if your business is in a complex financial situation, a chartered accountant is in a better position to provide expert advice. They have experience in tax planning and cash flow forecasting and can help you navigate the challenges facing your business.

If your company has issues with compliance with financial laws, retaining a chartered accountant gives you peace of mind. They are certified to provide accounting services and help you navigate complex regulations on tax compliance, VAT and payroll.

When choosing the best accountant to work with, you need to consider their level of skillset and benefits to your company. However, enlisting the services of an accounting firm will help you find the best accountant.