What does the ABA Accredited Business Accountant certification mean for your career in accounting? A whole lot.
Or the more common question is "What Does ABA Stand For In Accounting?"
But let's take a quick step back. How does the becoming an Accredited Business Accountant differ from becoming a certified public accountant (CPA)?
This is a very difficult subject to bring up without getting a very emotional response.
There are many, many people who want to be accountants or carry out accounting and taxation services but have absolutely no interest in becoming a CPA or a CIMA (Chartered Institute of Managerial Accountants).
Because it's simply not a career path they want to pursue. And it's not about avoiding the requirement to complete a masters degree, to become an auditor for several years and pass the CPA examinations. Far from it.
Two of the biggest benefits of becoming a CPA mean that you can:
Now, Accountants (or even Bookkeepers) who do not have the CPA certification cannot carry out these roles.
But what these Accountants can do is - compile or prepare the financial statements.
See the difference? Non-CPA accountants and CPA's can prepare the financial statements but only the CPA's can review and provide an official (attested) report on these financial reports.
With that in mind, explaining why taking the Accredited Business Accountant certification becomes a lot easier.
Accredited Business Accountants are normally specialists in providing accounting services to
SME's or individuals need accounting services but if they use a CPA then they'll probably have to pay a lot of money. In many cases their businesses can't afford that. And that's where the beauty of market place kicked in.
Non-CPA accountants are able to provide very similar (if not the exact same) services at substantially lesser costs.
For example, they can prepare the financial statements needed for the annual tax return or to help support a loan application.
It allows non-CPA accountants to obtain a certification that will make them stand out from the crowd.
Let's say you're an SME and you need a set of financial statements prepared. You don't want to pay a CPA firm as it's over the top for what you need.
A friend then refers you to two local non-CPA accountants who provide that service at a reasonable rate. One of them is an ABA and the other isn't.
A little research shows you what the Accredited Business Accountant has gone through to get that certification (see below).
The chances are that you will immediately feel more comfortable and take up his/her services even if they happened to be a bit more expensive.
Here's another incredibly sensitive topic. Does this certification mean you can now call yourself an Accountant? The State Accountancy Boards (NASBA) have fought hard in many cases to stop anyone who isn't a CPA from being allowed to do that.
So, you need to be really, really careful here. As always it does depend in which State you live in and the Accreditation Council for Accountancy and Taxation (ACAT) – who provide the ABA - gives guidance on what their certification allows you to call yourself. Let's summarize:
If you live in Delaware, Iowa or Minnesota then passing the ABA certification actually meets the requirements to practice public accountancy. However, Minnesota does require that you achieve a 75% pass rate on both sets of exams. So you can call yourself an Accredited Business Accountant.
There are currently 21 states where calling yourself a public accountant does require a level of disclaimer but you can call yourself an “Accredited Business Advisor”.
Want to use a disclaimer? You may need to add something like to business card, website and other documents you send out - "The accounting services provided by this firm do not require a state license."
And there are some states where you simply are not allowed call yourself an accountant regardless of any disclaimer. Again, taking the ABA accreditation does allow you to call yourself an “Accredited Business Advisor”
OK, so we can finally get to what's involved. There are three key components to obtaining the Accredited Business Accountant professional designation:
Split into two sections each of which has 100 multiple-choice questions i.e. 200 questions in total:
Practice 1 (100 questions: 3.5 hours)
Financial Statement Preparation, Presentation & Reporting
Practice 2 (number of questions per subject are in brackets and totals to 100: 3.5 hours)
So what are the rules for sitting the exam? You can take the exams at the same time or split them up. However, as soon as you pass one part you have to pass the other part within eighteen months. That makes sure you don't go “out of date”
When - Offered Twice Per Year (in 2011 one period was between May/June and the second is November/December)
Cost - Taking both Practice and Practice costs you $335. However, you can take them separately and pay $200 for each of them. Can't really see why you'd pay for them separately – not good financial sense!
Pass Mark – You need to score at least 70 on both exams to pass
As always you need to do your due diligence. Is the ABA Accredited Business Accountant certification recognised by a legitimate authorising body?
We're happy to say that the Institute for Credentialing Excellence ( a national body) recognizes the ABA certification
You can head on over to ACAT's website to get even more details on the benefits of becoming an Accredited Business Accountant.