Practising through a limited company

Practising through a limited company

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In the last few months two different people have approached me regarding their ungappiness with the service they were getting from their accountants. In both cases the service was being provided by a limited company and they could not find out which accounting body did the practice belong to.

I am wondering how is the market being regulated. Anyone can set-up a company and start providing accounting services to un-incorporaed and incorporated bodies. How can one determine to which accounting body a limited company's director belomgs. But then the director may not be a member of any accounting body and it is the manager who has the membership and practsing certificate.

Any insight on this issue will be greatly appreciated.

Mahmood Ahson

Replies (9)

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By User deleted
03rd Nov 2008 15:53

Practice Description
Thanks for the clarification regarding ICAEW.

The point I was trying to make though (perhaps not very clearly) was that because CIMA registers members, and not practices, ICAEW and ACCA firms are able to use this description to their advantage whilst CIMA members can be classed as 'unqualified' because their firm doesn't appear on either the ICAEW or ACCA websites, even though CIMA members are just as qualified being 'Chartered' themselves.

I think the idea of having one central list of all qualified practising accountants would remove this obstacle for CIMA members and level the playing field, giving the customer just one point of reference to check on directors qualifications.

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By User deleted
03rd Nov 2008 13:19

Thanks David, you're right (as normal!)
I stand corrected - the "more than 50% " only applies to the shareholding, not the numer of directors. I'd missed the distinction when I was looking at the helpsheet.

Thanks

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By User deleted
02nd Nov 2008 00:35

To CP re ICAEW regs
Just to clarify that the ICAEW requires 'more than' 50% of members to be Chartered Accountants in order to use the term Chartered Accountants for a practice. The remaining principals must also be affiliated to the ICAEW.

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David Winch
By David Winch
02nd Nov 2008 16:38

CFL - not quite correct

CFL

I think you will find that ICAEW allows an incorporated firm to describe itself as chartered accountants where "50 per cent or more of the directors are Chartered Accountants and more than 50 per cent of the aggregate in nominal value of the voting and of the non-voting shares are held by Chartered Accountants" and the remaining directors are affiliates of ICAEW.

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By User deleted
01st Nov 2008 15:50

To NH
Also remember that as well as checking with ICAEW or ACCA, prospective client may also wish to check with CIMA.

Whilst there are fewer CIMA members in practice than ICAEW or ACCA, CIMA members are just as qualified as members of the other two. It is unfortunate that CIMA is often ignored in these forums.

A CIMA practice may choose not to incorporate 'Chartered Management Accountants' into its title because CIMA's rules state that 'all' partners of the practice must be CIMA members, whereas ICAEW requires only 50%.

I would say that it is up to the accountant concerned to get the message accross that they are qualified in their marketing, a central register of all accountants would be good though because then the public would only have to look in one place!

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Teignmouth
By Paul Scholes
22nd Oct 2008 22:54

How does the company describe itself?
I run my practice through a Ltd company. Being a member of one of the recognised bodies I will obviously promote my membership by calling my practice XYZ Ltd, Chartered thingies or whatever.

So if a firm (Ltd or not) does not stipulate it's membership on letterheads etc then chances are it's not a member.

I have to emphasise however that this does not mean that the person doing the work is not qualified to do so, ie whether s/he has letters after their name or not (which is why (thankfully) the process to protect of the word accountant never got passed 1st base).

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By User deleted
22nd Oct 2008 22:19

For MA
Anyone can call themselves an accountant, prepare company accounts and submit them to Companies House. (Excluding of course a company that requires a statutory audit)

It is buyer beware and one reason many seek to protect the desciption of the word accountant.

A client of a regulated body will atleast know his accountants have PII.

If you know the directors names of a company providing accountancy services you can check with the ICAEW or ACCA to find if they are qualified accountants.

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By ahson_u
22nd Oct 2008 21:46

Accountancy services
CFL, I am not much concenrned about the difference between the quality of services offered by limited company vs sole traders/partnerships. I am more concerned about non-recognised accountants preparing accounts for limited companies and issuing the accountants report. Does anyone monitor this? Members of the recognised bodies have passed the exams and acquired the necessary experience and if there is a complaint then the relevant body will take-up the complaint. What about the non-members hiding behind limited liability screen-who is monitoring them? Or is it the old 'buyer beware' maxim?

Should there not be a common roster of practising accountants who are members of recognised accountancy bodies whether they are CCAB or not?

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By User deleted
22nd Oct 2008 18:59

I practise through a limited company
and it is the company who is regulated and listed on the ICAEW website, not me as the director.

In order to be able to describe the company as "Chartered Accountants" I had to fulfil all the usual criteria (and kick my non accountant husband off as a director!).

There is no reason why a limited company is more likely to be qualified than a sole trader / partnership. In all cases, anyone or any company can call themselves accountants.

Of course all accountancy service providers should be registered with either a supervisory body or HMRC for money laundering purposes but that is irrelevant I think to your question. This has nothing to do with qualifications or regulation.

If the people don't know who the accountancy company was regulated by, then I'd assume that the practices were not qualified or regulated.

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