SAIPA vs SAICA vs CIMA- What’s the difference?
The usual response I receive when telling people that I’m an accountant, is “So you’re a CA”.
It is now, that I have to start the explanation that I am actually a financial accountant. But then I can’t stop there because the look of confusion on people’s faces tells me that they have no idea what a financial accountant is. So this is it, explained as simply as possible. Generally, there are three types of accountants. Financial accountant, chartered accountant, management accountant.
Financial accountant
Financial accountants make up the bulk of your practicing accountants. They are qualified to do the books of companies not classified as public companies. That is generally the SME’s. The companies with turnovers of less than R100 million per annum. Although there are many other requirements, this in my opinion is the most identifiable trait of a non-public company as defined by the Companies Act.
Businesses that might come to mind here are mostly owner-managed businesses with just a couple of employees. A good test of how many businesses would need the services of a financial accountant is to walk down a street in your neighbour-hood and think to yourself does this business look like a business with an annual turnover of R100 million. You would find that 90% of businesses are not public companies. This 90% would all utilise the services of a financial accountant.
The regulatory body that professional accountants in this field would typically belong to is SAIPA, the South African Institute of Professional Accountants. More info on that can be found at www.saipa.co.za.
Financial accountants because of the nature of their clientele would also usually provide services like payroll, UIF, Compensation fund liaisons. Their role in business has become one that extends towards financial management of mostly SME’s, which in my opinion make up the bulk of a financial accounting firm’s clientele.
Chartered accountant(CA)
This is the accountant that is most popular in SA. Most people refer to accountants as CA’s. I believe this stereotype has come about because that is what it was in the past. Before the differentiation of the accounting profession, the guy who did your financial statements was a CA. Their was no SAIPA or CIMA accountant. Accountants were CA’s. Everybody else was a book-keeper.
Then the realisation came about that hey does a CA really need to do the books of a firm doing a million rand turnover a year? Can their specific skill-set not be better utilised elsewhere? That is where I believe the financial accountant and management accountant professions were born. To split up this work, so that each profession could master their specific skills and in that way serve the communities they operate in.
Public companies need CA’s to do their books. The big guys like Sasol, MTN, Vodacom. These type of businesses are not owner managed. They have shareholders who are not involved in the day to day running of the business. Their function is to check that these public shareholders interests in these massive companies are being looked after. They make sure, for example, that if a mine manager states that he has 200 bakkies at his mine, that he does in fact have that 200 bakkies, and that he hasn’t sold 5 and pocketed that money.
The professional body that CA’s generally belong to is the South African Institute of Chartered Accountants (SAICA). More information on this can be obtained from their website at www.saica.co.za.
Management accountant
This is perhaps the newest accounting profession in SA at the moment. When I say newest I mean new in the sense that it is largely unknown in SA. What a management accountant does in a nutshell is using the past figures of a business to predict what will happen in the future. And make decisions based on these findings.
Estimations, cash flows, budgets. A management accountant working for a company like Coke would perhaps make decisions that coke has made more money selling 340ml cans instead of selling 500ml bottles. Or to give orders to the production line to produce a million 1L bottles, 500 000 1.25L, and 2million 2L bottles.
The professional body governing this profession is the Charted Institute of Management Accountants (CIMA). It is a UK based qualification and their footprint in South Africa is being exponentially increased. Many patrons in the accounting fraternity are of the opinion that this profession will fully blossom in the next 5-10 years where the role of the management accountant will be much more pronounced in SA. More info on CIMA can be found at www.cimaglobal.com.
That’s about it. It is my hope that this post has served its purpose of being informative.
I must state that these are my personal views. I should also state here that mentioning the names of companies and professional bodies is merely for illustrative purposes and no malice is intended.