How to check an accountant’s qualifications as a company director

Choosing an accountant to help you manage your financial affairs is one of the most important decisions you’ll make as a limited company director.

The person you eventually go with will have access to a wide range of information about your business’s performance and future viability. He or she will also be the one you trust when it comes to arranging your tax affairs and submitting important documents to the government on time and accurately.

That’s why it’s a good idea to always go for someone you trust and who is appropriately qualified for the job. You can read our guide to choosing the best accountant here.

In this article, we’ll look at some of the important qualifications you should look out for when choosing an accountant for your new limited company.

Accountancy qualifications to look out for

In the United Kingdom and Ireland, qualified accountants are typically accredited by a professional body or organisation.

The organisation provides educational materials and exams that prospective accountants sit. Once they’ve passed, they receive a certificate and a qualification to demonstrate their capabilities.

As a result, if you’re searching for a trusted accountant, then it’s a good idea to start with professional memberships.

The most well-known of these is the Institute of Chartered Accountants in England and Wales, or the ICAEW for short.

It offers a well-known qualification called the ACA (Associate Chartered Accountant).

New businesses may find they need someone who can assist them not only with bookkeeping and tax filing, but also with strategic decisions such as business plans and prudent spending.

An accountant qualified with the Chartered Institute of Management Accountants (or CIMA for short) will, as the name suggests, have particular expertise in management accounting and business finance. Many CIMA members work within businesses rather than accountancy practices, so check that the accountant has the right experience for the services your company needs.

Another organisation is the ACCA (short for the Association of Chartered Certified Accountants). Accountants with this qualification are expected to have “the cross-sector accounting and finance knowledge, skills and professional and ethical values needed in all organisations and every industry.”

There are other professional bodies for accountants, too, such as AAT, ICAS, and Chartered Accountants Ireland.

If you need specialist tax advice, you may also come across accountants and tax advisers with qualifications from the Association of Taxation Technicians (ATT) or Chartered Institute of Taxation (CIOT), including the CTA qualification.

You can find out more about the UK’s major accountancy bodies here.

Can a firm be qualified, but its individual accountants not be?

At some accountancy firms, some employees may not be qualified even though a manager is. This is fairly normal in specialist firms that cater to the needs of smaller limited companies (such as contractors, freelancers, and consultants).

This is usually fine, as some tasks in the accountancy process are relatively straightforward and can be carried out by a junior staff member.

One thing you must make sure of if you take this option, however, is that someone suitably experienced at the firm reviews the important work related to your accounts.

For example, ask who will review your company’s annual accounts and Corporation Tax return before they are filed.

The directors remain legally responsible for the company’s accounts. The board approves the accounts and a director signs the balance sheet. There is no general requirement for a qualified accountant to sign a small company’s accounts.

Must accountants be qualified?

It’s not a legal requirement for an accountant to be qualified. When setting up a new limited company, you don’t have to make sure your new accountant is a member of any professional body, and it’s not your responsibility to make sure that the person you choose is accredited.

By the same token, anyone can, in theory, become an accountant, and they don’t have to pass exams or gain certification in order to claim the name.

However, it’s important to think carefully before choosing an accountant who isn’t accredited.

While it may be that an unqualified accountant will charge less and save you money in the short term, you must weigh that benefit against the risk that they will cost you money down the line by not doing the job well enough.

Accountancy requires many complex technical skills, and if the unqualified accountant you chose caused havoc for you, you may have to pay again to get a professional to put it right.

For more on whether professional help is worthwhile, read our guide to whether you need an accountant for a limited company.

What should you check before hiring an accountant?

Qualifications are important, but they aren’t the only thing you should check before signing up with an accountancy firm.

Ask which professional body the accountant belongs to and check their membership or practice status on the body’s website where possible.

You should also find out who will actually look after your company. At some firms, most day-to-day work is carried out by more junior staff, so ask who reviews your accounts and tax returns and who you can speak to when you need advice.

Accountancy service providers must also be appropriately supervised for anti-money laundering purposes. This may be through a professional body or, where applicable, HMRC.

Finally, ask whether the practice has professional indemnity insurance. This provides important protection if professional mistakes cause a client financial loss. Professional bodies may require their members in public practice to maintain this cover, but you should still check rather than assume.

It’s worth doing these checks before you appoint an accountant. You’ll be trusting the firm with some of your company’s most important financial and tax information, so don’t choose on price alone.