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Beware taking advice from an unqualified accountant

Before you seek advice from your accountant, make sure they’re qualified to offer it.

A recent survey by the Institute of Financial Accountants (IFA) found that many people are unaware that someone can set themselves up as an ‘accountant’ without having any qualifications.

In the survey, only 18 per cent of people who responded knew that ‘accountant’ is not a protected title – that is, a job title protected by law and used only by professionals who are properly registered.

The sad reality is that literally anyone can decide they want to be an ‘accountant’ and start up a business. - John Edwards chief executive of the IFA

While relatively few people actually do this, Edwards warns that it is smaller businesses that are most at risk of hiring an unqualified accountant. Unfortunately, in doing so, they may be leaving themselves open to receiving inaccurate or potentially even fraudulent advice.

This risk has grown over recent months, when even qualified accountants and businesses are grappling with the rapidly changing legislation and business support schemes, let alone those ‘accountants’ who are unqualified and operating without the support and oversight of a professional body. - John Edwards chief executive of the IFA

Risks of using an unqualified accountant

The title ‘accountant’ is not protected by UK law. This means that many small businesses and business owners might be taking advice from accountants who they believe are fully qualified, but who are actually unqualified, unregulated and possibly uninsured too.

As John Edwards, chief executive of the Institute of Financial Accountants (IFA) warns, at worst, using an unqualified accountant could lead to a business inadvertently committing fraud. In these cases, the business could be hit with a fine or even forced to close altogether.

How to protect your business: a checklist

You can take the following steps to make sure any accountant you use is fully qualified and a member of a professional body.

1. Ask for their qualifications

Before you engage an accountant, ask them if they are fully qualified, and what qualifications they have.

In the UK, there are many qualifications that an accountant can hold. These include the following:

Chartered tax adviser

A Member or Fellow of the Chartered Institute of Taxation (CIOT). Uses CTA, ATII or FTII after their name.

IFA financial accountant or IFA tax adviser

An Associate or Fellow of the Institute of Financial Accountants (IFA).

Chartered certified accountant

A Member or Fellow or the Association of Chartered Certified Accountants (ACCA). Uses ACCA or FCCA after their name.

Chartered accountant (England, Wales and Ireland)

A Member or Fellow of the Institute of Chartered Accountants in England and Wales (ICAEW) or Chartered Accountants Ireland (CAI) (formally, but still legally, known as the Institute of Chartered Accountants Ireland (ICAI)). Uses ACA or FCA after their name.

Chartered accountant (Scotland)

A Member of the Institute of Chartered Accountants in Scotland (ICAS). Uses CA after their name.

Chartered management accountant

A Member or Fellow of the Chartered Institute of Management Accountants (CIMA). Uses ACMA or FCMA after their name.

Certified public accountant

An Associate or Fellow of the Certified Public Accountant Association (CPAA). Uses ASPA or FSPA after their name.

Many qualified accountants hold more than one qualification. For example, if they have both ‘FTII’ and ‘FCA’ after their name, this means they are a Fellow of CIOT and a Fellow of ICAEW.

2. Ask them if they are a member of a professional accountancy body

The organisations listed above are all professional accountancy bodies. When looking to hire an accountant, ask the person you’ve approached whether they are a member of one or more.

3. Check the accountant's membership with the professional body

An accountant you’re looking to hire may tell you they are a member of a professional body.

You can check that this is accurate information by contacting the organisation involved and asking to speak to its membership department.

Or, you can see if the accountant is listed in the institution’s online directory of members. There are links to the websites in the ‘How to find a qualified accountant’ section below.

4. Ask for references

To check the quality of their work, you could ask the accountant for a couple of references from satisfied clients. Once you receive them, you can review them before you go ahead and hire the accountant to work on your behalf.

How to find a qualified accountant

You can search for qualified accountants on the following websites:

Reference to any organisation, business and event on this page does not constitute an endorsement or recommendation from the British Business Bank or the UK Government. Whilst we make reasonable efforts to keep the information on this page up to date, we do not guarantee or warrant (implied or otherwise) that it is current, accurate or complete. The information is intended for general information purposes only and does not take into account your personal situation, nor does it constitute legal, financial, tax or other professional advice. You should always consider whether the information is applicable to your particular circumstances and, where appropriate, seek professional or specialist advice or support.

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