Accountancy and book-keeping

Accountants are more highly qualified than book-keepers, and will generally manage, interpret and advise on accounts while the latter simply keep them. They may also be licensed to carry out more functions, like auditing, and may specialise in a particular accounting area. There are several of these accounting areas, as demonstrated by the number of different accounting institutions; at this stage it is only really necessary to point out that:

- public accounting involves the accounting for money raised and spent by government and its departments and agencies

- financial accounting deals with the presentation of largely historical information, often to satisfy legal requirements, and will include the accounting reports of businesses

- management accounting presents accounts that are useful for business managers and that can be used to guide future decisions.

One definition of accountancy calls it ‘the art of recording, classifying, and summarising in a significant manner and in terms of money, transactions and events which are, in part at least, of a financial character, and interpreting the results thereof’.

This definition introduces two of the basic concepts of modern accounting:

- ‘significant’ – means that only items or amounts that make a difference should be included

- ‘in terms of money’ – says that accounting can only consider items that have a monetary value.

Other ideas that are embodied in modern accounting include:

- accounting entity – a clear boundary around the area of economic activity

- period of account – records should be for a defined period and a statement should be at a specified date

- continuity of activity – assumes that the organisation will continue

- objectivity – impartial, independent and unbiased

- consistency – the same methods of accounting should be used

- conservatism – not over-optimistic

- disclosure – all relevant facts made public

- accruals – profit or loss should be allocated to the business area that made it

- matching – profit or loss shown in the same accounting period.

Accountancy and book-keeping in the Services

Each Service has its accountants and book-keepers, who are specialists in accounting, and many of whom gain professional qualifications in the field. However, many other Service people deal with accounts as part of their duties. Supervisors of bars and messes, treasurers of sports and adventurous training clubs, managers of non-public facilities and the like may be responsible for assets and cash that add up to a tidy sum. They may not have formal training and letters after their name but they are certainly involved in accounting and/or book-keeping.

Accounting is a recognised and valued skill that can open the door to a number of second careers. It can be mastered at a distance and without practical experience. It is therefore an ideal subject for in-Service personal development.

Qualifications and training

The Institute of Chartered Accountants in England and Wales

The ICAEW has a membership of about 125,000 worldwide. Half are employed in industry, finance and commerce, and the rest in public practice. The range of professional activities carried out by Chartered Accountants includes auditing, financial reporting, taxation, personal finance, corporate finance, financial management and information technology.

People wishing to qualify as a member of the ICAEW have to pass two sets of exams. Training (including 450 days’ work experience) takes place at one of over 2000 UK offices (there are a few more overseas) that are authorised to train Chartered Accountants. These may be public practices or commercial organisations in which the student will work in-house.

Chartered Institute of Public Finance and Accountancy

CIPFA currently has approximately 13,500 members and 2500 students, and deals with accountancy and financial management in the public services. Chartered Public Finance Accountants influence decisions through financial management. They also assess the financial viability of proposals that influence services in a changing environment.

Its qualification system operates at four levels. Exemptions are available and qualifications may be gained through a mixture of academic study and work experience.

Association of Chartered Certified Accountants

ACCA is the world’s largest accountancy body, with over 300,000 members and students in 160 countries. Its qualification can open up a career in accountancy, management and financial services, and the Association currently has 70 staffed offices and centres. Chartered Certified Accountants work throughout the financial sector in public practice, financial services, the health service and the public sector.

The Professional Scheme (Chartered Certified Accountant) exams are in three parts, which cover accounting and auditing principles and practice, and general business management. Relevant professional training within a wide range of work environments is also required. The minimum age at which one can start the Chartered Accounting Technician’s programme is 16, with no qualifications required.

Chartered Institute of Management Accountants

Chartered Management Accountants are professional accountants (there are over 77,000 students and 60,000 members in 155 countries) who apply their skills to enhance management decision-making. They are able to give financial matters a commercial focus, equally important for the executive chairman of an international group or a junior project analyst.

The CIMA qualification takes students through three stages. At first, the emphasis is on basic accounting and management principles, then it moves into subjects like financial accounting and information technology, before concentrating on business and management topics at foundation, intermediate and final levels. Three years’ relevant practical experience is required before achieving full membership.

Association of Accounting Technicians

AAT is the professional body for Accounting Technicians, with more than 100,000 Members, Affiliates and Students worldwide. It provides a recognised qualification and membership body for accounting staff at technician level. It is sponsored by other accounting bodies, and successful AAT students are exempt elements of their qualifications.

Accounting technicians work at all levels of finance, from accounts clerk to financial controller, in all industries and sectors, and in organisations large and small. They may be the only trained finance staff employed, or part of a balanced team working alongside chartered accountants and administrative staff.

Some AAT full members provide accounting services on a self-employed basis, providing an accountancy and taxation service, particularly to small and medium-sized enterprises.

Institute of Financial Accountants

The IFA is the world’s oldest non-chartered accountancy body and operates in over 80 countries worldwide. Financial accountants are employed in senior positions in industry, commerce and practice, taking an active role in the financial management of companies and operating mainly at board level.

Membership qualification takes the form of exams at Pre-professional, Associate and Fellow levels. A relevant qualification from another accountancy body may provide exemption from some, or even all, exams. IFA also assesses workplace competency profiles to grant exemptions on an individual basis.

International Association of Book-Keepers,

Book-keepers are the people who actually complete the books of accounts providing financial support to other professionals. The Association’s exams are offered in 90 countries. Many book-keepers are highly competent at accounting, and some are expert in specialist areas including:

- purchase accounting

- sales accounting and credit control

- accounting for stock

- cash and banking

- nominal ledger

- accounting for VAT

- payroll accounting

- data processing

- miscellaneous responsibilities.

The IAB syllabus operates at foundation, intermediate and final levels, with exemptions considered for holders of other accountancy qualifications. It also runs a number of other linked qualifications.

Accountancy degrees

The Universities and Colleges Admissions Service (UCAS) holds details of accountancy courses in British institutions.

Employment

Employment in accountancy and book-keeping varies enormously, from finance director of a large multinational to part-time book-keeper working from home on the accounts of a few small, local businesses. There are opportunities in public service and in private business, in public practice and in-house.