By: Faith Ngwenya, Acting CE and Technical Executive, South African Institute of Professional Accountants (SAIPA)
Choosing an accountant based on prestige rather than proficiency can sometimes have expensive and risky results.
A common misconception is that the term “accountant” encompasses a small – although significant – set of skills that deliver basic financial management. Another incorrect assumption is that areas of specialisation in the accountancy profession follow a superiority ranking, or the notion that some accountancy designations are better than others.
There is no accountancy designation that is superior to another when it comes to accountancy. Rather, the value of the accounting service performed is not dependent on title or designation, but on the relevance of knowledge and experience according to what the client or employer needs.
To gain the most benefit from their accountancy service, an organisation needs to understand exactly which type of accountant is the right fit for them, specifically, and why.
Many people find it surprising that there are a number of designations and regulatory bodies in the accountancy space. In South Africa, professional designations are formalised and regulated by the South Africa Qualification Authority (SAQA) through a stringent process. While some of the accountancy designations require only a university degree, many require additional studies and practical work, or articles, to be completed before the professional designation can be awarded.
Once a designation has been registered with SAQA, these marks of professional competency are regulated by specific professional bodies. These institutes take on the role of awarding professional competency recognition to people who have proven their competencies in their specialised areas of expertise. In addition, the institutes are then responsible for ensuring that professionals who use these designations adhere to a strict set of rules and professional conduct.
While the title allocated to an accountant might sometimes allude to the type of function in which each designation is competent, a deeper understanding of the areas of specialisation can save businesses a lot of time and money. It is worth visiting the websites of each regulating body to discover whether the competencies and experiences of a relevant accountancy designation hold relevant value for a specific type of business.
Accountants can perform numerous functions and issue reports in terms of the Companies Act, Close Corporations Act, Micro lending industry regulations, Sectional Titles Act, Non-profit Organisations Act, Income Tax Act, Schools Act and various other Acts.
From a business value point of view, an accountant can – dependent on their specific combination of knowledge and expertise – add value to the performance or compliance of any business in the following ways:
Creator of business value
As a creator of business value, some accountants can drive strategy and design business models. In this role an accountant needs to be capable of focused decision-making and have a clear understanding of financial statements and how they impact the business. They also have to know how to preserve business value through risk management and awareness of functions like business rescue.
In this area the accountant might perform the role of CEO, strategic manager, business advisor/consultant, due diligence consultant, financial manager, or business analyst.
Enabler of business value
In the space of acting as an enabler of business value, an accountant can become involved in financial decision making for the business – often the role is that of the company CFO, or an official of the Treasury department.
This role focuses on performance and assessment of cost and management requirements, playing the role of internal auditor and even systems analyst towards a deeper understanding of business process and performance. Accountants in this role are often the financial manager and/or general business manager as they understand the overall value of the business.
Preserver of business value
As preserver of business value, an accountant becomes involved in functions such as Interpretation and analysis of financial information, Internal Auditing, Risk Management and Business Rescue. It demands an understanding of the importance of compliance and the role it plays in perpetuating growth and a sustainable business.
In this area an accountant may take on the role of business analyst, business risk manager, systems analyst and even financial manager. They are an advisor and a consultant, someone who can guide and support a business in its growth and development over the long term.
Reporter of business value
Some accountants specialise in reporting the value of a business through an involvement in both financial and non-financial reporting. A great example is legislators, or practitioners preparing financial statements and independent reviews. They are aware of compliance, can plan ahead, forecast the financial future of a business, and hold a managerial role in the financial department.
An accountant, regardless of specialised designation, has to provide a business with the support it needs to drive it forward, create employment and ignite growth. If they can create and enable value while managing risk and reporting, then they are an invaluable asset to any organisation.
Finding the right accountant is more than the sum of their qualifications, it is a blend of training and insight which has the potential to support a business. A firm hand and a sound background will see any accountant become a trusted advisor and reliable partner in any enterprise.
Choosing an accountant based on proficiency, rather than prestige, is the start of a valuable partnership.