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‘Misleading’ institute banned after misrepresenting chartered status

Three recognised professional bodies went to the High Court to seek an injunction preventing an upstart European organisation from using the description “chartered accountant”.  

2nd Nov 2020
Editor AccountingWEB
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Chartered Accountants Ireland
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ICAEW, ICAS and Chartered Accountants Ireland (CAI) joined forces to stop the “misleading” Brussels-based European Institute of Chartered Accountants (EICA) from handing out qualifications.

The High Court injunction prevents the upstart from claiming any connection to ICAEW, ICAS and Chartered Accountants Ireland. In addition to misleading those seeking true accounting qualifications, the chartered bodies argued that the EICA had misappropriated chartered status to offer FCA and CA designations along with professional education, certification and ongoing development .

The High Court granted an injunction against the EICA and its directors Muhammad Javaid Iqbal and Vesela Kirilova Stavreva. If the directors do not comply with the ban, they could be held in contempt of court.

Afterwards, ICAEW, ICAS and CAI issued a joint statement reinforcing their message that EICA was not recognised as a chartered or qualification awarding body and was therefore misleading people: “It’s important that people have trust in chartered accountants, so we work hard to maintain the integrity of our qualifications and the description ‘chartered accountant’, and to prevent the public from being misled. We are pleased the High Court recognised the importance of this,” they wrote

“We invest heavily in brand protection for the benefit of our membership and we do not tolerate misuse or misrepresentation. We will not hesitate to take action where necessary.”

Chartered accountant

The chartered status originates from the Royal Charter issued by the Queen, which adds a strange twist to the profile of this European outfit .

The legal disupte underlines the protected nature of “chartered accountant” as opposed to just accountant, which has no legal protection.

Recent research from PracticeWeb with small businesses revealed that professional qualifications did have sway with clients. More than three-quarters of respondents (78%) said choosing an accountant who is member of a professional body or institute was “important to some degree”.

An interview respondent told the researchers: “Chartered status matters – there are cowboys out there.”

The professional qualification debate intensified earlier this year after the government proposed plans that require advisers to all be members of a recognised professional body. The aim of this proposal is to stamp out “behavioural problems” that HMRC pins on the 30% of tax agents who are not members of professional bodies.

This stance frustrated AccountingWEB members who are “qualified by experience”.

“Having prepared personal tax returns, trust and estate tax returns and advised individuals on straightforward tax planning for 60 years mainly within a legal practice, I fail to see how passing an exam and having qualifications is going to help me,” commented Adrian Everton on AccountingWEB.

Equally unimpressed with the chartered accountant status is AccountingWEB reader SteveHa, who worked within HMRC for 20 years and a further 20 years in practice.

“The disciplinary reports and the huge increase in tribunals cases for aggressive (and failed) avoidance schemes would suggest that there are a fair few ‘qualified’ who are cowboys, and as someone qualified by experience, I would hope that points to not all unqualified are cowboys.”

Replies (12)

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By Paul Crowley
02nd Nov 2020 20:14

But EU could not give a toss

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By brianheg
03rd Nov 2020 09:56

There are zero references to the EU in this article. Not everything is about Brexit.

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By [email protected]
03rd Nov 2020 09:12

Only 30% of the behavioural problems caused by unqualifieds!. Does that mean that the remaining 70% of the problems are caused by qualifieds?
With that sort of poor performance maybe it is time to hang up the qualification and save several £k per year?
My experience of clients asking if I am qualified represents less than 10 out of hundreds over the last 15 years.
The world is changing and I am seeing hosts of online accountants popping up and I doubt that they have a qualification between them (just my opinion). Clients seem to be unconcerned if they have the letters or not.

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Replying to [email protected]:
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By brianheg
03rd Nov 2020 09:54

I think you've misread the statistic in the article.

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By SteveHa
03rd Nov 2020 10:32

He has, but it doesn't make it right.

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Replying to brianheg:
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By [email protected]
03rd Nov 2020 12:42

The comment was intended to be tongue in cheek but 100% less 30% still leaves 70% unacceptable behaviour by someone out there.

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By practice for sale
03rd Nov 2020 13:11

Umm...no.... don't think it does. It says that 100% of the unacceptable behaviour is perpetrated by the 30% of agents who are not carrying a recognised qualification.

That said, I don't actually believe that anyway. Measured in value I would imagine that the dodgy schemes dreamt up by the highly qualified (and remunerated) members of the tax profession would account for the vast majority of any tax problems encountered by HMRC.

But pick on the small guy why dont you, as they dont have the resources to mount a reasonable defence.

I digress from the OP, though, and agree that the 'brand' that costs me an arm and a leg each year should be protected,.

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By Ben Alligin
03rd Nov 2020 10:31

Thank goodness the big 4 are chartered firms, just think of all the problems that could arise if non-chartered accountants conducted audits?

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Replying to Ben Alligin:
Mark Lee 2017
By Mark Lee
03rd Nov 2020 12:33

Ben Alligin wrote:

Thank goodness the big 4 are chartered firms, just think of all the problems that could arise if non-chartered accountants conducted audits?

Far be it from me to defend the Big 4 - but we should keep a sense of perspective - even when being satirical. The number of problem audits is a tiny fraction of the number of audits conducted each year, If there was less regulation etc I doubt the quality of audits would increase.

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By paddy55
03rd Nov 2020 11:44

Anybody who is a member of the Institute of Chartered Accountants of XYZ country can describe himself as a member of the Institute of Chartered Accountants of XYX country.
By international convention, this can be abbreviated to "chartered accountant (XYZ country)".

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By Arcadia
03rd Nov 2020 17:45

I think the reason we are never asked for our qualifications is the same reason you never ask for the the qualifications of your GP or consultant, or solicitor. The public, even the well informed public, assume that it is not possible for someone to present themselves in the role of medical doctor , solicitor or accountant without having an appropriate level of qualifications and regulation behind them. I do not think HMRC would be worrying about the level of expertise in those acting as agents if they did not perceive there is a problem in some quarters. As has been mentioned before, provided there is appropriate grandfathering of those QBE then no-one should have anything to fear from measures designed to root out the cowboys.

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By AnnAccountant
04th Nov 2020 10:16

The mistake they made was using the term "Chartered". They could have set up a similarly named and legal body to rake in fees from non-quals - couldn't they Tony? The public don't know the difference.

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