I have been in the UK for a year now and I have noticed a few things with regards to the way Finance Departments function here.
Because the vast majority of British businesses are not subject to Sarbannes-Oxley, many of them function in a way that just drives my “audit-control procedures” mind nuts. Because of all the audit controls for corporations in Canada, and even the United States, what is of paramount importance is what the UK calls “Statutory Accounts”. For the rest of the world this is known as “External Financial Statements” – you know, those wacky statements that get published to investors, the investment community and what not, items such as: Balance Sheets, Income Statements, Cash Flow Statements, Disclosure Notes, Statement of Retained Earnings and MD&A. For the vast majority of my career my focus has been on this. And most accountants, who have gone for formal designation-goaled training, this is where the emphasis is as well. It’s the reverse here in the UK.
There’s this rather flimsy differentiation between what a Financial Accountant does and what a Management Accountant does. In many ways the Management Accountant does exactly what a Financial Accountant does. Here in the UK the Financial Accountant works on the Statutory Accounts – making sure that the various accounting principles are adhered to as well as guidance from IFRS (International Financial Reporting Standards). Management Accountants work on the Management Accounts – accruals, deferrals, amortization of fixed assets as well as prepaid allocations. They produce reports for internal management so that management can review their divisional results and make important business decisions with regards to the work of the company.
The ridiculous thing for me is that I come from a background where I did both. I come from a background where it was expected that a designated accountant could do both – as there is very little fucking difference. The only real difference is in the production of the disclosure notes – things like any operating leases, and how to report them, any outstanding long-term debt and providing a schedule in the disclosure notes so that investors and creditors know where the obligations are for the entity in the coming 1+ years. As well as reporting any tax losses and how the entity intends on applying them – either retrospectively or to future periods.
I have gone to different job interviews and I explain that I am completely stymied as to why the UK insists on separating the two – they are one in the same. I have been asked what I would be called if I was in Canada applying for the same job – and I tell them the title would probably be “Senior Accountant”.