In Flux: The Changing Landscape of Accounting Qualifications

Accountancy qualifications header

As a leading accountancy job board in the UK, GAAPweb has a highly educated and qualified audience of finance professionals ranging from Accounts Assistants to CFOs. In fact, an Audience Insight Report that we published earlier in 2020 revealed that, of a 3,000+ strong community, 84% hold a degree and 76% possess a professional accounting qualification.

One of the most interesting stories to emerge from the data we gathered concerned the significant shifts in popularity of each of the four most commonly held professional accounting qualifications among our audience.

As has been the case for several years, qualifications offered by the Association of Chartered Certified Accountants (ACCA) and the Chartered Institute of Management Accountants (CIMA) proved to be the most popular among the GAAPweb community, accounting for 28% and 22% of our audience respectively. However, the number of AAT (Association of Accounting Technicians) qualified respondents grew significantly from 9% in 2018 to 20% last year, overtaking the ACA (Association of Chartered Accountants) at 14% to become the third most popular qualification among our audience.

The AAT cannot always be directly compared to the ACCA, CIMA and ACA qualifications, since the former is for accounting technicians and the latter three for chartered accountants, but the significant jump in AAT respondents - combined with rapidly rising salaries offered to those with this qualification - compelled us to take a closer look at the changing landscape of accounting qualifications.

A Significant Shift

Indeed, this landscape is changing significantly. Accounting for 35% and 32% of our audience respectively in 2018, ACCA and CIMA’s prevalence remained unchallenged two years ago, but in 2019 their lead dwindled, with ACCA’s 28% and CIMA’s 22% much closer to the 20% of respondents holding the AAT qualification. The number of our audience with the ACA qualification - offered by the Institute of Chartered Accountants in England & Wales (ICAEW) - suffered similar decline, dropping from 22% in 2018 to 14% in our most recent survey.

When presented with our findings, Rob Alder, Head of Business Development at the AAT, suggested that the rising number of AAT qualified respondents could be attributed to a shift in hiring habits. In the past, organisations largely sought graduate recruits who wanted to travel the traditional pathway to accountancy qualification, but recently “a new model has emerged with a blended pool of talent mixing school leavers, graduates and experienced adults together. New entry routes, job roles and programmes have been designed by organisations to appeal to a wider audience.”

The AAT qualification may appear favourable to school leavers who want to break into finance and accountancy without going to university as it is a “debt free way of entering the profession and one that pays from your first day,” says Alder.

Last year’s 11% rise in AAT qualified candidates was accompanied by an average salary increase of almost 29% - equivalent in real terms to around £9,000 per year. Conversely, salaries for ACA and CIMA qualified candidates remained fairly flat, experiencing growth of 1.58% and 1.09% respectively, while for ACCA Accountants in our community, pay rose by just 0.15%.

Qualification

2018 average salary

2019 average salary

% change

AAT

£32,771

£42,103

+28.48%

ACA

£87,040

£88,414

+1.58%

CIMA

£68,291

£69,037

+1.09%

ACCA

£57,598

£57,686

+0.15%

To explain the huge salary jump reported by AAT qualified respondents, Alder suggests that employers are increasingly seeing the value of the AAT qualification.

“They require people with the knowledge of accounting which our qualifications provide,” he says, “and the practical skills designed within our courses mean that employers can get a return for their investment straight away. These skills are needed across all businesses and therefore are in demand. AAT qualified salaries have always been disproportionately lower than chartered accountants’ salaries so some catching up is taking place.”

Although CIMA qualified Accountants in our audience reported an average salary increase of just 1.09%, a survey carried out by the Chartered Institute of Management Accountants itself found members to have been offered an average pay rise of 5%. 

Despite receiving the highest average salary increase, AAT qualified candidates were less likely (58%) to receive a pay rise than ACA (67%), CIMA (65%) and ACCA (60%) qualification holders last year. Overall, 60% of the GAAPweb community reported a pay rise in 2019, so at 58%, the AAT was the only qualification among the four most popular that fell below the average.

Mind the Gaps

It’s not just pay and popularity that sets the AAT apart from the crowd, either. Among our audience, the Association of Accounting Technicians was the only one of the top four qualifications to boast a higher number of females (60%) than males (40%) in its membership.

Indeed, female representation is a point of pride for the AAT.

“Few things make us prouder than the fact that around two in three AAT members and AAT student members are female” wrote Chief HR Officer Olivia Hill in an article for International Women’s Day this year, “we’ve also had ten female Presidents to date.”

However, the AAT are aware that gender equality successes within their own ranks do not necessarily translate into the wider profession.

“If women feel they are able to enter accountancy, but not progress through the ranks,” writes Hill, “then the gender pay gap problem won’t go away.”

With a male-female split of 54% to 46%, ACCA was the qualification to strike closest to a true gender balance, but for ACA and CIMA, the stories were vastly different. With an overwhelming male majority of 72% among respondents, ACA is the qualification where gender imbalance peaks.

Meanwhile, with 66% male membership among our audience, it appears that CIMA also have some work to do when it comes to gender representation. However, with a current cohort of students made up of 51% males and 49% females, a more equal and balanced future may be in sight for CIMA.

“As an organisation, our mission is to drive a dynamic accounting profession full of opportunities accessible to everyone. We have a profession-wide committee focused on diversity and inclusion,” says CIMA’s Lead Manager of Communications and Campaigns, Sarah Freytag-Traut, “as well as conferences and forums to advance the role of women in business and society. In fact, in 2019, we hosted the Association of International Certified Professional Accountants Women’s Leadership Summits in both the UK and the US.”

Qualification

% males

% females

AAT

40%

60%

ACCA

54%

46%

CIMA

66%

34%

ACA

72%

28%

According to our report, the overall gender pay gap in finance and accountancy was 26% - but for three of the top four most popular qualifications, gender pay discrepancies were closer to the national average of 17%.

CIMA qualified candidates faced the most significant gender pay gap, with men out-earning women by 22%, while ACA’s gap of 18% was the second widest. As well as having higher female representation, ACCA and AAT qualifiers reported slightly lower pay gaps of 17% each.

Title Fight

The findings of our survey suggest that certain relationships exist between the different qualifications and the average salaries of various job titles within finance and accountancy.

For example, CIMA was the highest paying qualification for several of the lower to mid-level qualified job titles that we surveyed, including Accounts Assistants, Assistant Accountants and Credit Controllers. The highest paid Auditors were also CIMA qualified. ACCA was the highest paying qualification for some of the other lower to mid-level professionals surveyed such as those working in Accounts Payable and Purchase Ledger roles, and provided the best pay packets for Financial Planning & Analysis specialists at the levels of Analyst and Manager alike.

Meanwhile, among senior and management-level qualified accountancy professionals including Finance Managers, Finance Business Partners and Finance Directors, those with the ACA qualification were paid more than their peers.

Some of the highest earning professionals in finance and accountancy were offered even greater monetary rewards if they had topped up their professional learning and development with a specialist qualification. For example, the highest paid CFOs, Heads of Finance and Financial Controllers boasted CTA (Chartered Tax Adviser) qualifications in addition to their ACA, ACCA or CIMA certificates. Supplementary qualifications such as this one offered by the Chartered Institute of Taxation (CIOT) provide highly coveted specialist knowledge that attracts top salaries.

Interestingly, these salary trends do not always align with the popularity of each qualification among different job titles. For example, ACCA is the most popular job title among Auditors, Finance Managers and Financial Controllers, despite the highest average salary of these three roles being offered to those with three other qualifications. Similarly, the majority of Finance Directors and CFOs in our audience are ACA qualified, even though those with the CTA qualification are likely to be paid more.

Industry Insights

Although the AAT did not account for any of the highest paying job titles that we surveyed, it was the most popular qualification for Accounts Assistants, Bookkeepers and Accounts Payable professionals, as well as being more prominent than ACA, ACCA and CIMA in the construction and education & training industries.  According to the AAT themselves though, the qualification is suitable for all industries and particularly prominent in accountancy practices and the public sector.

When asked why their qualification was the most popular in the industries of manufacturing & engineering, FMCG & consumer goods and sport & leisure, Sarah Freytag-Traut at CIMA pointed to the fact that the qualification was born out of a business need rather than an accounting one.

Where the ACCA and ACA qualifications focus predominantly on financial reporting, tax and audit, CIMA concentrates on management accounting areas including business strategy, operations and financial management. This means that CIMA members typically work in industry, but their careers are not restricted purely to finance, often finding roles in business areas such as IT, operations and strategy.

“New and emerging technologies, demographic shifts, market upheaval and evolving consumer expectations are transforming the business world, impacting every industry, every sector and every business function,” which Freytag-Traut says is increasing the demand for the unique combination of business and finance skills instilled in CIMA qualified Accountants.

“Organisations can no longer rely on traditional business models to succeed and need to reassess everything from their product and service offerings to their talent management strategy,” says Freytag-Traut, suggesting that CIMA members are sought in the named sectors - and others - to “play a pivotal role in developing business strategy, drive innovation and boost productivity in the digital age.”

ACCA was the most popular professional qualification within accountancy practices and the public sector, as well as several industries including charities, utilities, technology and more.

ACA qualified respondents were offered the highest salaries in 11 of the 20 industries we surveyed, while the remaining sectors dished out the greatest pay packets to those with specialist qualifications like the CTA or ACT (The Association of Corporate Treasurers). Predictably, AAT did not offer the highest average salary in any sector, but it may come as a surprise that neither did ACCA or CIMA.

Despite offering the highest pay in the majority of industries, ACA was the most popular qualification in just one sector last year: fintech. With an overall average annual salary of £76,666, fintech was the highest paying industry that we surveyed, but, populated by just 1% of respondents, this sector accounted for one of the smallest segments of the GAAPweb community.

Location, Location, Location

When it comes to popularity in different locations across the UK and around the world, two of our surveyed qualifications dominate: ACCA and AAT.

In England, ACCA is favoured by respondents in the South East, South West and London, while AAT is the most popular in the North West, North East, East Midlands and West Midlands, indicating a North-South divide when it comes to preferred accounting qualifications.

However, when it comes to salaries, ACA respondents report the greatest earnings in the majority of English regions including the North West, North East, East Midlands, South East and South West. The treasury qualification ACT was the highest paying in London and the West Midlands, but ACA was not far behind.

Elsewhere in the United Kingdom, CIMA was the highest paying accountancy qualification in both Scotland and Wales.

Internationally, ACCA comes out on top as the favoured accountancy qualification in Asia, Australasia and Europe. Accordingly, when our audience were asked if they would consider relocating for a career opportunity, ACCA qualified respondents were most likely (45%) to say yes. 43% of our overall audience indicated willingness to relocate for the right opportunity, making ACCA qualifiers the only group among the four most popular qualifications above the average.

In comparison, 39% of CIMA and 34% of ACA qualified respondents would consider making the move, perhaps enticed to stay put by their higher than average earnings.

Elsewhere just 31% of AAT qualified respondents consider relocation a viable career option, perhaps due to the relatively higher number of junior positions filled by these professionals. However, if there’s one thing that AAT, ACA, ACCA and CIMA respondents can all agree on when it comes to relocation, it’s their destinations of choice. Qualification seemed to have no impact here, with London, Europe and Asia being the top three most desired locations across the board.

Extra, Extra

Our respondents are rewarded with added incentives on top of their salaries for their hard work, expertise and qualifications. 53% of the GAAPweb audience were paid a bonus last year - 50% of whom received 10% or more of their basic pay - while 53% were also provided with benefits.

In addition to their highest average salaries, ACA qualified members of our community were more likely to receive a bonus (68%) and benefits package (70%) than ACCA, CIMA or AAT qualified respondents. With 57% offered healthcare by their employers, this was by far the most popular benefit among ACA qualifiers, but 8% were offered gym contributions, another 8% received childcare support and 7% had access to travel loans.

CIMA and ACCA qualified candidates also reaped the rewards of 2019, with the majority taking home bonuses and benefits packages. With 49% of CIMA and 40% of ACCA respondents indicating access to a healthcare scheme, this was the most frequently reported benefit among these professionals.

Qualification

% bonus recipients

% benefits recipients

ACA

68%

70%

CIMA

61%

64%

ACCA

51%

53%

AAT

39%

41%

The AAT was the only one of the four most popular qualifications where bonus (39%) and benefits (41%) recipients fell below the overall average, likely due to the lower level of the qualification when compared with ACA, ACCA and CIMA. Among those AAT respondents who did receive benefits, healthcare (26%) was once again the most popular perk.

According to the AAT’s Chief HR Officer Olivia Hill, 50% of its members now benefit from flexible working options which “help to change the traditional ways of working and ensure more equal opportunities, regardless of responsibilities outside of the workplace.”

This attitude towards benefits packages is further testament to the importance which the AAT appropriately bestow upon gender equity in finance and accountancy.

What does the future hold?

“All qualifications need to reflect the changes in the profession,” says Rob Alder of the AAT when asked how he sees the landscape of professional accounting qualifications changing in the future. “The effect of technology, AI and automation will mean that the accounting technicians of the future will need to know the basics of accounting plus a different set of skills including decision-making, communications, data analysis and business partnering.”

For their part, the AAT have started to work on their new syllabus for AQ2022 which will incorporate these skills to help futureproof their membership.

Sarah Freytag-Traut at CIMA predicts “a downturn in recruitment for new employees, apprentices, graduates and in the creation of new positions” following the Coronavirus crisis and the impact that the pandemic has had on businesses of every shape and size.

“That being said, finance professionals such as CIMA members and students have a great and invaluable set of skills to offer businesses that will be essential in devising new business strategies and driving recovery,” says Freytag-Traut, “the road ahead will of course be difficult, but finance professionals can really put their competencies to use and showcase how much value they bring to businesses, even in the most uncertain and complex times.”

Reassuringly, as the AAT looks to the future they intend to keep one eye on the profession and one firmly on their people.

“To continue building on our success, we’ll be ensuring that our qualifications are relevant to the changing market needs,” says Alder, “and that we offer increased value, support and training to our members.”

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