Me, and my girlfriend, are both accountants. I know, imagine the parties. I'm an ACA; my better, prettier looking half is an ACCA. Of course, I joke about the solutions to most answers being in my books rather than hers, but at the end of the day, it’s just banter (kind of).
It got me thinking about whether or not it actually matters what qualification your accountant holds, or, if it even matters whether or not they are qualified at all.
My conclusion, probably surprisingly, is that it doesn't matter at all. Its all about substance over form.
I know plenty of people who carry out the functions of an accountant, who are not qualified but have many years of experience and provide a perfectly good service to their clients. Conversely, I know plenty of other qualified accounts who I wouldn’t trust with bank account reconciliations.
Ultimately, directors of limited company, partners and sole traders are all responsible for the information they file with companies house and HMRC, not their respective accountants. If your accountant makes a mistake you can of course seek compensation. However, the fines and penalty letters will always arrive on your doorstep, eventually.
Choosing your accountant (qualified or not) is a personal choice. You disclose enormous amounts of confidential information to your accountant so it’s not only important to get on with them, but trust them too.
Therefore it’s important to check a few items before proceeding;
· Check to see if your accountant has indemnity insurance. Do they offer fee insurance should you be the subject of a HMRC enquiry (which is softer way of saying tax investigation).
· Ask if they a member of any professional accounting bodies; members of such bodies need to complete at least three year’s work experience and a series of examinations. In addition each member must maintain their knowledge each year and declare that they have done so. The main practice accounting bodies (there are of course others) in England are;
§ The Institute of Chartered Accountants in England and Wales (www.icaew.com)
§ The Association of Chartered and Certified Accountants (www.accaglobal.com)
· Check their experience and if at all possible request some client references.
· Request a draft engagement letter to ensure that the services you have asked for are covered as well as the fee terms. It helps protect you should services not be carried out as expected.
· See what type of clients they already act for. Some specialise in certain fields, some are more general. It’s not uncommon for whole departments in accountancy firms to leave and start their own practice. If possible, ask for a client reference.
· Try to meet the people, who will actually be carrying out the work. It may not be who you have initially been talking to.
It’s important for me to re-iterate that, although I’ve stated it doesn’t matter if your accountant is qualified of not, you are responsible for the information you file.
I have heard quotes and expressions similar to “I like my accountant, he asks no questions”. If this is the case, be prepared to deal with HMRC when they come knocking because I doubt that accountant will be fighting your corner when the fines and interest come rolling in. Saving tax is great, simply deferring tax is not so great.