Chartered accountants are members of a professional accountancy body that awards the title under a royal charter or an act of parliament. The words name a membership, not a level of skill and not a job, which is why they mean something exact in the country that granted them and nothing automatic anywhere else.
Two separate grants sit behind the title, and they get confused constantly. One is membership, which is what makes a person a chartered accountant. The other is permission to serve the public, which these bodies issue as a second document and can price, refuse or cancel on its own terms.
The Title Is Defined as Membership of a Named Institute
India’s statute writes the definition about as plainly as it can be written. Chartered accountant means a person who is a member of the Institute (Chartered Accountants Act, 1949, section 2(1)(b)). The Institute in that sentence is the Institute of Chartered Accountants of India, which the same Act incorporates.
The Act then reserves the words rather than merely offering them. Every member of the Institute in practice shall, and any other member may, use the designation of a chartered accountant, and no member using that designation shall use any other description, whether in addition to it or in substitution for it (section 7). A proviso to the section keeps three things legal. A member may add another description or letters to his name, if entitled to them, to show membership of another Institute of Accountancy, in India or elsewhere, that the Council recognises. A member may also show any other qualification he possesses. And a firm whose partners are all members in practice may be known by its firm name as Chartered Accountants.
Using the words without the membership is an offence rather than a liberty, and the penalty section reaches two different people. It reaches a person who is not a member of the Institute and who either represents that he is a member or uses the designation Chartered Accountant. It also reaches a member who does hold membership, has no certificate of practice, and represents that he is in practice or practises as a chartered accountant. Both are punishable on first conviction with a fine up to a stated maximum, and on any subsequent conviction with imprisonment, a larger fine, or both (section 24).
That second limb is the useful one, because it says out loud that membership alone does not let a member hold himself out as practising.
Membership and the Right to Practice Are Two Separate Grants
Read the certificate rule and the point stops being subtle. No member of the Institute is entitled to practise, whether in India or elsewhere, unless he has obtained a certificate of practice from the Council (section 6(1)). The certificate carries an annual fee payable on or before the first day of April each year, and the Council may cancel it in such circumstances as may be prescribed (section 6(2) and section 6(3)).
Quebec draws the same line under different words. Within the framework of the profession, the professional activity reserved to the chartered professional accountant is public accountancy (Chartered Professional Accountants Act, section 4). To do that reserved work, the chartered professional accountant must obtain a public accountancy permit, and compilation engagements that are not intended exclusively for internal management purposes are carved out of the requirement (section 5).
England and Wales run it as a body rule rather than a statute. ICAEW chartered accountants are required to hold a practising certificate and professional indemnity insurance if they offer professional services to the public (ICAEW, What is chartered accountancy?).
So a resume that says chartered accountant is telling you about the first grant. Whether the person also holds the second one is a separate question with a separate answer, and it is worth asking directly.
Which Bodies Award It
The designation belongs to individual institutes, so what stands behind it depends on which institute granted it.
In India the working route into membership is examination and training under the Institute. A person who has passed such examination and completed such training as may be prescribed for members of the Institute is entitled to have his name entered in the Register of members (section 4(1)). The section lists five routes in all. Three of them are transitional entries for people already qualified or practising when the Act commenced. The fifth is the one to read carefully on an offshore resume, because it admits a person who has passed such other examination and completed such other training outside India as is recognised by the Central Government or the Council as being equivalent to the examination and training prescribed for members, and a proviso lets either body impose further conditions where the person is not permanently residing in India (section 4(1)).
Foreign qualifications do not walk into that register either. Subject to a reciprocity bar that shuts out subjects of any country the Central Government has notified as blocking or unfairly discriminating against persons of Indian domicile, the Council may prescribe the conditions, if any, on which foreign accountancy qualifications are recognised for entry (section 29).
In England and Wales, ICAEW members carry the letters ACA or FCA after the name, and the body ties them to a training standard rather than to an examination alone (ICAEW, What is chartered accountancy?).
Quebec is the case that catches people out, because the province did not simply rename the designation. Its Chartered Professional Accountants Act constitutes a single professional order made up of everyone qualified to practise as a chartered professional accountant in the province (section 1) and repeals the old Chartered Accountants Act outright (section 31). It then closes the words themselves. No person may in any way whatsoever use the title chartered accountant, certified general accountant, certified management accountant, professional accountant or public accountant, or any title, abbreviation or initials that may lead to the belief that the person is one of those (section 13). The designation granted there today is Chartered Professional Accountant.
South Africa runs its own version, CA(SA), through the South African Institute of Chartered Accountants, and the training-contract route behind it is set out in outsourcing to South Africa.
What the Title Does Not Do in the United States
Nothing automatic. The credential is granted under another country’s law and carries that country’s practice rights, so it is not a US license and it does not become one by being impressive.
Two consequences follow, and both are worked through in full elsewhere. US state accountancy law restricts who may hold out under accounting titles at all, this one included, which is covered in the CPA job description. Whether a foreign credential opens a shortcut to a US license is a different question, answered by the mutual recognition agreements, and the answer for the two largest offshore accounting countries is in hiring offshore CPAs.
For a US firm building an offshore team, the practical reading is narrower than the debate usually is. The designation tells you the person cleared a real professional standard in their own jurisdiction. It does not transfer signing authority, and it was never going to, because the work sits inside your firm’s review chain and your partner signs.
Common Questions
The difference is a protected title. By law anyone can call themselves an accountant. The title chartered accountant and the letters ACA or FCA indicate that the person has undertaken a minimum of three years in-depth training, passed a series of rigorous examinations in financial management, auditing, business strategy and taxation, and committed to continuing professional development to keep their skills up to date (ICAEW, What is chartered accountancy?).
The other half of the difference is enforcement. An unqualified accountant answers to general law. A chartered accountant also answers to the institute that admitted them, which can discipline them and can take the title back.
Neither sits above the other, because they are not the same kind of thing measured on one scale. Each is a credential granted under one jurisdiction’s law, carrying that jurisdiction’s practice rights, and neither confers the other’s.
No. The same membership-and-permission split runs one level up: an entity is admitted to a register, or it is not, and a company that employs chartered accountants is not thereby a chartered accountant firm. In India that line is statutory, and which register applies to which entity is set out in top accounting firms in India.
Accountably places trained offshore accountants and tax preparers inside US CPA and EA firms, and a firm can run a block of its own work through a trial task before a client file depends on it.
