Beware taking advice from an unqualified accountant

Risks of using an unqualified accountantIt’s essential to exercise caution when considering advice from an unqualified accountant. Entrusting your financial matters to someone without the proper credentials can lead to serious repercussions.

A qualified accountant possesses the expertise, knowledge, and understanding of intricate financial regulations and practices.

Relying on an unqualified individual may result in inaccurate financial assessments, erroneous tax filings, and potential legal complications

.According to a recent survey conducted by the Institute of Financial Accountants (IFA), a significant number of individuals remain unaware that individuals can declare themselves as ‘accountants’ without possessing any formal qualifications.

The survey disclosed that merely 18 percent of the respondents were aware that the term ‘accountant’ lacks legal protection, implying that anyone can utilize this title without proper registration as a certified professional.

To safeguard your financial well-being, it’s wise to seek guidance from professionals who are certified and recognised within the field, ensuring accurate and reliable advice for your financial decisions.

Risks of using an unqualified accountant

Utilizing the services of an unqualified accountant exposes individuals and businesses to a range of substantial risks that can have far-reaching consequences.

These risks arise from the absence of proper training, expertise, and adherence to professional standards, undermining the accuracy, legality, and integrity of financial operations.

An unqualified accountant might lack the comprehensive understanding needed to provide accurate advice, potentially leading to incorrect tax calculations, misguided financial strategies, and non-compliance with legal obligations.

Moreover, their lack of accountability and oversight can result in poor record-keeping, leaving entities susceptible to regulatory penalties and financial instability.

Ultimately, relying on an unqualified professional can compromise financial well-being and jeopardise compliance with regulations.

Here are five specific risks associated with employing an unqualified accountant, compounded by the absence of governing bodies and proper redress mechanisms:

  • Tax Liabilities: Misinterpretation of complex tax regulations can result in either underpayment or overpayment of taxes, potentially leading to penalties and legal consequences.
  • Financial Mismanagement: Inadequate financial analysis can lead to misguided business decisions, impeding growth and overall profitability.
  • Lack of PI Insurance: Unqualified accountants often lack professional liability insurance (PI insurance), leaving individuals and businesses financially exposed in the event of errors, negligence, or incorrect advice.
  • Non-Compliance: Unfamiliarity with industry-specific regulations and financial reporting standards can lead to unintentional compliance breaches, inviting regulatory actions.
  • Fraud and Misrepresentation: Lack of appropriate oversight heightens the risk of fraudulent activity, potentially causing substantial financial losses and reputational damage.

Given the potential gravity of these hazards, it’s essential to prioritise the engagement of qualified and regulated accountants, who are overseen by reputable governing bodies, to effectively mitigate these risks and ensure sound financial management.

How to protect your business: a checklist

To ensure the credentials and affiliation of any prospective accountant, you can implement the following measures:

To ensure the credentials and affiliation of any prospective accountant, you can implement the following measures:

  1. Verification of Qualifications: Before enlisting the services of an accountant, initiate a conversation regarding their qualifications and credentials. In the United Kingdom, accountants hold diverse qualifications, such as:
    • Chartered Tax Adviser: A member or fellow of the Chartered Institute of Taxation (CIOT) with designations like CTA, ATII, or FTII.
    • 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 of the Association of Chartered Certified Accountants (ACCA) denoted by ACCA or FCCA.
    • 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), using ACA or FCA.
    • Chartered Accountant (Scotland): A member of the Institute of Chartered Accountants in Scotland (ICAS), designated as CA.
    • Chartered Management Accountant: A member or fellow of the Chartered Institute of Management Accountants (CIMA), bearing ACMA or FCMA.
    • Certified Public Accountant: An associate or fellow of the Association of Certified Public Accountants (ACPA), identified as ASPA or FSPA.
  2. Professional Body Membership: Inquire whether the accountant is affiliated with a professional accountancy body. The aforementioned organizations represent esteemed professional accountancy bodies.
  3. Confirmation of Membership: Cross-verify the accountant’s membership with the relevant professional body. You can directly communicate with the organization and approach their membership department for confirmation. Alternatively, consult the institution’s online directory of members, accessible through links provided in the ‘How to Find a Qualified Accountant’ section.
  4. Request for References: To ascertain the caliber of the accountant’s work, you may solicit a few references from content clients. Upon receiving these references, you can assess them to make an informed decision regarding hiring the accountant’s services for your financial matters.

By following these steps, you can ensure that you engage a fully qualified accountant who adheres to professional standards and is affiliated with reputable governing bodies.

How to find a qualified accountant

When embarking on the search for a qualified accountant, it’s important to take a strategic approach to ensure you find a professional who meets your financial needs and expectations.

Consider seeking recommendations from trusted sources, such as friends, family members, colleagues, or business associates. Personal referrals can provide valuable insights into an accountant’s reliability, competence, and ability to tailor their services to your specific requirements.

In addition to personal recommendations, you can explore online platforms that list qualified accountants, as well as professional directories maintained by accounting associations. These directories often categorize accountants based on their areas of expertise, certifications, and affiliations with reputable bodies.

Furthermore, before making a decision, schedule consultations with potential accountants to discuss your financial goals, concerns, and expectations. This initial interaction will help you gauge their communication style, professionalism, and suitability for your needs.

By combining personal recommendations with online resources and one-on-one consultations, you can confidently select a qualified accountant who aligns with your financial aspirations.

You can search for qualified accountants on the following websites:


In conclusion, the risks inherent in seeking advice from an unqualified accountant are significant and multifaceted. Entrusting one’s financial matters to an individual without proper credentials can lead to inaccurate financial assessments, erroneous tax filings, and potential legal complications.

The absence of oversight and accountability can further amplify the potential for financial mismanagement, non-compliance, and even fraudulent activities. As the financial landscape continues to evolve, the importance of relying on certified and regulated professionals cannot be overstated.

Prioritizing qualified accountants with recognized affiliations ensures not only accurate financial guidance but also safeguards against the numerous risks associated with seeking advice from unqualified sources.

Ultimately, informed decisions in selecting a qualified accountant are paramount for maintaining financial stability, legal compliance, and peace of mind.

Insolvency & Restructuring Expert at Business Insolvency Helpline | + posts

With over three decades of experience in the business and turnaround sector, Steve Jones is one of the founders of Business Insolvency Helpline. With specialist knowledge of Insolvency, Liquidations, Administration, Pre-packs, CVA, MVL, Restructuring Advice and Company investment.