This helpsheet outlines the conditions and restrictions governing the use of the title ‘chartered accountants’ by firms.
‘Chartered accountant(s)’ is not a title which can be adopted and used by anyone or any firm and there are strict rules governing its use.
Members may also wish to refer to the following related helpsheets and information:
Firms entitled to use the description ‘chartered accountants’
The use of the description ‘chartered accountant(s)’ by firms is governed by regulations made by the council of ICAEW. If the firm satisfies the criteria of being a ‘member firm’, and all non-chartered principals are affiliates of ICAEW, then the firm can describe itself as ‘chartered accountants’.
Please note the ‘use of description’ member firm definition is different to the definition in the Principal Bye-laws for an ICAEW member firm.
For the purpose of the ‘use of description’ regulations, a member firm means:
a) a member of ICAEW engaged in public practice as a sole practitioner; or
b) a partnership engaged in public practice, of which more than 50% of the rights to vote on all, or substantially all, matters at meetings of the partnership are held by chartered accountants or by another member firm; or
c) a limited liability partnership engaged in public practice, of which more than 50% of the rights to vote on all, or substantially all, matters at meetings of the partnership are held by chartered accountants or by another member firm; or
d) any body corporate (other than a limited liability partnership) engaged in public practice of which:
(i) 50 per cent or more of the directors are Chartered Accountants or another member firm(s); and
(ii) more than 50 per cent of the nominal value of the voting shares is held by Chartered Accountants or by another member firm(s); and
(iii) more than 50 per cent of the aggregate in nominal value of the voting and non-voting shares is held by Chartered Accountants or by another member firm(s);
and provided that in the case of a firm that is a parent entity, more than 50% of the income of the group is derived from public practice and, in the case of a firm that is a subsidiary entity, more than 50% of the income of the group is derived from public practice and the subsidiary entity is engaged in public practice.
Where a member firm is a partner, member, director or shareholder of a firm using the description ‘chartered accountants’ under the regulations, then its interests at meetings of partners, members, directors or shareholders must be represented by an individual who is a chartered accountant.
Meaning of the term chartered accountant
In the regulations the term chartered accountant means a member of The Institute of Chartered Accountants in England and Wales (ICAEW) or a member of one of the following bodies:
- The Institute of Chartered Accountants of Scotland (ICAS)
- Chartered Accountants Ireland (CAI)
- The Institute of Chartered Accountants in Australia and New Zealand (CA ANZ)
- The Canadian Institute of Chartered Accountants (CICA)
- The South African Institute of Chartered Accountants (SAICA)
- The Institute of Chartered Accountants of Zimbabwe (ICAZ)
A member firm which engages in public practice is entitled to describe itself as ‘chartered accountants’ provided that any partner, member (in the case of a limited liability partnership) or director (in the case of a company) who is not a chartered accountant or member firm must:
a) hold affiliate status with ICAEW under its Designated Professional Body (Investment Business) Handbook, Licensed Practice Handbook, Audit Regulations, Local Audit Regulations, Probate Regulations or Insolvency Licence Regulations;
b) hold affiliate status with ICAEW under these regulations;
c) be registered for audit work or local audit work by ICAEW;
d) be accredited for probate work by ICAEW
e) be licensed by ICAEW under its Designated Professional Body arrangements or ICAEW Licensed Practice Handbook.
If the firm wants to use the description ‘chartered accountants’ any non-member principals need to become a general affiliate. The only exception is if:
- the principals are already an ICAEW audit, investment business (DPB) or insolvency affiliate in that same firm; or
- a member of ICAS, CAI, ICAZ, CICA, SAICA or CA ANZ.
In considering the application for general affiliate status the ICAEW will need to be satisfied that:
a) the applicant it, or has been offered the position of, a principal in a member firm;
b) the applicant is a fit and proper person and is certified by at least two members;
c) the applicant has completed a form of undertaking; and
d) the applicant is able to demonstrate appropriate and relevant experience of accountancy or of a related discipline or holds one or more qualifications as specified in regulation 21c.
Please note that the last point above does not apply to an applicant for general affiliate status who is a director in a member firm, engaged in public practice incorporated in the Isle of Man or Singapore and which has only two directors, provided that one director is a chartered accountant and holds more than 50% of the voting rights in the board of directors, committee or other management body.
A person recognised as a general affiliate does not have any rights to use the designatory letters ACA or FCA or to describe themselves as a ‘chartered accountant’.
More information and application forms for general affiliate status are available from the apply to be an affiliate page of the website.
Any practice, using the description ‘chartered accountant(s)’, which is not wholly comprised of chartered accountants should distinguish chartered from non-chartered accountants by the use of designatory letters or otherwise.
Members of overseas chartered accountancy bodies should state in full the country of origin of their qualification eg, 'CA (South Africa)', 'ACA (Australia)'. For more information please see practice names and letterheads.
Limited companies and limited liability partnerships (LLPs) can be principals. For the purposes of deciding whether a firm can use the description ‘chartered accountants’, if a limited company or LLP principal is entitled to use the description ‘chartered accountants’ in its own right, it is treated as an ICAEW member in the firm in which it is a principal. A corporate principal may become an audit affiliate, a licensed practice affiliate, an investment business affiliate, a local public audit affiliate or a probate affiliate but not an insolvency affiliate. Only individual insolvency licence holders can become insolvency affiliates.
ICAEW member firm brand mark
Practising ICAEW member firms may use the ICAEW brand mark. However, qualifying as a member firm does not automatically mean that a firm can use the description ‘chartered accountants’.
The ICAEW Regulatory Board (IRB), or those to whom it has delegated authority, has an absolute discretionary power to allow firms to use the description ‘chartered accountants’ who do not meet the specific criteria above. An annex to the regulations explains what ICAEW will consider in reaching a decision and how to make an application to the Head of the Regulatory Practice if required.
If in doubt seek advice
ICAEW members, affiliates, ICAEW students and staff in eligible firms with member firm access can discuss their specific situation with the Ethics Advisory Service on +44 (0)1908 248 250 or via webchat.
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