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

Accountants may be licensed by a variety of organisations, such as the UK's Association of Chartered Certified Accountants (ACCA) and Institute of Chartered Accountants, and are recognized by titles such as Chartered Certified Accountant (ACCA) and Chartered Accountant (UK, New Zealand, Canada, India, Pakistan, South Africa), Certified Public Accountant (US, New South Wales, Hong Kong), Certified Management Accountant (Canada), Certified General Accountant (Canada), or Certified Practising Accountant (Australia). Some commonwealth countries (Australia and Canada) often recognise both the certified and chartered accounting bodies. The majority of "public" accountants in New Zealand and Canada are Chartered Accountants; however, Certified General Accountants are also authorized by legislation to practise public accounting and auditing in all Canadian provinces, except Ontario and Quebec, as of 2005. 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 practising, accountancy institutes do not have such authority. However, auditors are regulated.

Commonwealth of Nations

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 Practising Accountant (CPA - Australia).

United Kingdom

In the UK, there are no licence requirements for an individual to be 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.

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 and International Accountants engaging in practice (ie selling services to the public rather than acting as an employee) must gain a "practising certificate" by meeting further requirements such as purchasing adequate insurance and undergoing inspections.

Accountants holding "practising certificates" 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. Both the CA and the CMA programs require a candidate to obtain a degree as a program entry requirement. The CGA program only 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) 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 three main local professional accountancy bodies.

  • Certified Practising Accountants (CPA) are members of CPA Australia.

However, the Chartered Certified Accountant (ACCA) qualification is also recognised 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.

New Zealand

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

In order to audit public companies an individual must be a member of either the NZICA or an otherwise gazetted body. Chartered Certified Accountant (ACCA) 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, practicing accountants include Certified Public Accountants (CPAs), Certified Internal Auditors (CIAs), Certified Management Accountants (CMAs) and Accredited Business Accountants (ABAs). The difference between these certifications is primarily 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, the practitioner may use Accredited Business Advisor.

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, People's Republic of China

General

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.

Accounting standards

The regulating of accountancy, auditing, membership, professional, licensing all falls under the HKICPA. However, in many cases, the HKICPA themselves are helpless in concluding what constitutes properly prepared financial statements. There were some attempts in obtaining external professional legal opinions on behalf of its members (e.g. what constitutes "true and fair") but they are non-binding in court. The ultimate True and Fair / True and Correct of a set of published financial statement falls under the Court system in Hong Kong, which relies on the generally accepted practice in Hong Kong. This is consistent with other common law practices.

In 2005, the HKICPA adopted almost all the most current accounting and auditing standards from the IFAC and its associated standard setting bodies with the additions of a few local written interpretations of these principal based accounting and auditing standards. Local written interpretations try to cater to the unique situations in Hong Kong such as the problem of the remaining land lease.

Prior to the formation of HKICPA in 1972 (or formerly know as HKSA before 2004 September), the auditing industry was loosely regulated. Organizations including The Society of Chinese Accountants and Auditors ("SCAACPA") has helped in standardising recognised auditors for financial statements.

There were also few serious accounting and auditing standards prior to 1986. Before 1972, auditing standards were often upheld by the individual integrity of these professional auditors. Accounting standards were based on the few international firms in the then colony including Lowe, Bingham and Matthews, KPMG, Sanford Yung, etc.

1972 was seen to be a turning point for the accountancy profession in Hong Kong. Most international accounting firms (the forebearers of the Big Four accounting firms today) established their presence in Hong Kong within a few years before or after the establishment of HKICPA.

In 1974, the british based accountancy body with a global presence - Association of Chartered Certified Accountants (ACCA) assisted with setting up the Hong Kong Institute of Certified Public Accountants (formerly named "Hong Kong Society of Accountants") as the local statutory accountancy body in Hong Kong.

Around 1985, the HKICPA adopted most of their auditing and accounting standards from ICAEW.

Around 1994, the HKICPA slowly adopted their auditing and accounting standards from the IFAC and its associated standard setting bodies. Full integration was achieved by the HKICPA within 10 years, i.e. in 2005. Senior accountants in Hong Kong may consider this a period of re-learning, adoption of frameworks and principle based standards and a more stringent in governance and regulation of the accounting profession.

Accountancy practitioners

There are no restrictions to call himself an "accountant" in Hong Kong as long as it does not imply that he is actually a qualified accountant or "Professional Accountant". However, non-qualified individuals (including those who were qualified overseas but not registered with HKICPA as an International Associate) who call themselves Professional Accountants, CPA or CPA(practising) in Hong Kong probably will face actions from HKICPA.

After 2004, all Professional Accountants are designated into Certified Public Accountant (CPA) or Fellow Certified Public Accountant (FCPA).

Individual CPAs who are licensed by the PAO to sign-off audited reports for financial statements of Limited Companies under Companies Ordinance would be known as Certified Public Accountant (Practising) (CPA(Practising)). To make it more confusing, there are no restriction for CPA(Practising) to call themselves simply as CPA. This "Practising" title appears to be similar in meaning as an "Registered Auditor" (R.A.) in some countries and is seen to be a form of (and the only) professional speciality.

From 1972 to 2004, all Professional Accountants in Hong Kong would call themselves either "AHKSA" (Associate member of HKSA) or "FHKSA" (Fellow member of HKSA). The individuals who were then licensed to sign-off audit reports were known as Certified Public Accountant or Public Accountants ("CPA or PA") prior to September 2004. These peculiar terms appears to be unique in Hong Kong, and has created confusion for the rest of the professions around the world, and even some accountants themselves, as to what AHKSA is. There were accounts for lay persons who cannot differentiate the differences between AHKSA and ACCA.

All the CPA and CPA(Practising) need to pass a set of examinations designated by the HKICPA. CPAs(Practising), in particular, have to go through more rigorous examinations and have to demonstrate that he is competent in local taxation and audits.

Memberships and other Affiliations

Accountancy is a well established and sought after profession in Hong Kong. A functional constituency in the house of legislature in Hong Kong is elected solely by the professional accountants themselves. Function constituency is unique in Kong Kong.

CPAs in Hong Kong has this peculiar phenominon, enjoying cross-membership with other local and overseas professional bodies. (Please feel free to add links to these bodies). Unscientific survey has been collected so far in identifying members with the following bodies.

Local bodies relevant to accountancy: The Taxation Institution of Hong Kong (TIHK) The Society of Chinese Accountants and Auditors (SCAACPA) The Institute of Financial Planners of Hong Kong (IFPHK) ITAccountants Associations (ITAA)

Overseas bodies: Association of International Accountants (AIA) Association of Chartered Certified Accountants (ACCA) American Institute of Certified Public Accountants (AICPA) Canadian Institute of Chartered Accountants (CICA) The Chinese Institute of Certified Public Accountants (CICPA) Chartered Institute of Management Accountants (CIMA) Chartered Institute of Public Finance and Accountancy (CIPFA) CPA Australia (CPAA) Institute of Chartered Accountants in Australia (ICAA) Institute of Chartered Accountants in England and Wales (ICAEW) Institute of Chartered Accountants of Ireland (ICAI) New Zealand Institute of Chartered Accountants (NZICA) Institute of Chartered Accountants of Scotland (ICAS) Institute of Chartered Accountants of Zimbabwe (ICAZ) South African Institute of Chartered Accountants (SAICA)

Accountancy | Finance | Professions

 

This article is licensed under the GNU Free Documentation License. It uses material from the "Accountancy qualifications and regulation".

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