Business accountancy terms
Below is a list of business-related terms found in the ICAEW Directory of Firms that covers the type of work a chartered accountancy firm may provide advice on. Terms are listed alphabetically. To browse the glossary choose a letter from A to Z below.
A B C D E F G H I L M N O P R S T U V
A
Accounts preparation/compilation
The preparation of accounts of businesses, companies or other organisations from the basic accounting records. This includes limited companies and partnership/sole trader accounts.
Administration
A rescue procedure under which a licensed insolvency practitioner is appointed to a company, which either is, or seems likely to become, unable to pay its debts. (See also Corporate Recovery)
Areas of accreditation
Three areas of accountancy work are regulated by statute: investment business, audit, and insolvency licence. Accreditation in Forensic accounting is also offered by ICAEW as a benchmark for experienced forensic accountants and expert witnesses.
Assurance services
Professional accountants perform independently designed tests on information management of an entity (normally the client) and give a conclusion on aspects such as its accuracy and presentation. Information may be financial or other types such as internal control and sustainability/greenhouse gas emission. Statutory audit is a type of assurance service on statutory accounts. Chartered accountants also provide an ICAEW Assurance Service, which may be a suitable alternative for some of audit exempt companies (see also audit exemption). For more information on other types of assurance services, go to icaew.com/assurance.
Audit
Companies operating above the small company turnover, asset and employment levels and some other organisations, are legally required to have a registered auditor report on the truth and fairness of the accounts.
Audit exemption
Certain small companies (for example with a turnover of less than £6.5m with less than 50 employees) are not legally required to have an audit.
Audit regulation
This is one of the areas of accountancy work which are regulated under statute by ICAEW. Under Part 42 of the Companies Act 2006, firms which wish to undertake company audit work must be registered with either ICAEW or another recognised supervisory body (RSB). If firms wish to promote company audit services they may choose to publicise the fact that they are registered auditors. There is no obligation to do so. This directory indicates whether a firm which has chosen to promote its company audit services is registered with ICAEW or with another RSB.
B
Bankruptcies
A business which is facing difficulties in paying its debts. If a formal insolvency procedure is needed (such as placing the company into administration) a licensed insolvency practitioner must be involved.
Book-keeping
The service of maintaining the basic accounting records of a business usually to trial balance, sometimes with associated other services such as VAT returns.
Book-keeping systems
Setting up and updating manual and computerised methods of recording your accounting transactions.
Business plans
Help with developing and writing plans for your business, together with forecasts of profit and cash flow, often with the purpose of securing finance for a business.
Business start-up
The compliance, structural, financial and logistical procedures needed to convert a business proposal into a viable operating business.
C
Capital gains tax – Limited companies
The taxation of gains or losses arising from the disposal of business assets.
Capital markets
Where large amounts of money are raised by companies, governments and other organisations for long-term use and the subsequent trading of the shares issued for such capital.
Carbon regulation strategy
Scenario planning, analysis and strategy building for organisations anticipating carbon regulation.
Cash flow management
The management and analysis of a company's cash flows. Careful cash flow management allows a company to estimate the amount of cash that it will have on hand at any one time, project trends in cash inflow and cash outflow, and evaluate whether a shortfall or surplus in cash could potentially occur.
Charity audit
Charities above certain size thresholds require an annual audit by an auditor registered under the Companies Act. An audit may also be required where other conditions apply. The audit requirements for company charities differ from those of non-company charities.
Charity reporting
The compliance with the legal, regulatory and management requirements of registered charities, including taxation and filing the annual report and accounts.
Climate risk and adaptation for development
Building low carbon and/or climate resilient development plans and providing advice on financing adaptation.
Company formation
Formation of a limited liability company including documentation, name availability and provision of the Memorandum and Articles and statutory registers.
Company secretarial service
Assistance with keeping statutory records of shareholders, directors and other company information.
Computer systems
How your business can benefit from the use of information and communications technology (ICT) including use of accounting software and e-commerce.
Computerised accounting systems and consultancy
Assistance with implementing computerised accounting systems, including appropriate software.
Corporate finance
Raising of finance for companies from banks and other institutions or through a share issue.
Corporate governance
The processes, policies, laws and systems affecting the way a company or firm is directed, administered or controlled.
Corporate recovery
Assistance for companies facing financial difficulties.
Corporate taxation
The rules that apply to corporate transactions and completion of corporate tax returns and dealing with HMRC.
Custom duties
Tax paid on goods exported or imported and the reliefs available.
D
Data processing services
The provision of computerised reports, usually of an accounting nature, from basic information supplied by you, more frequently through outsourcing.
Disposal of businesses
All aspects of disposing of your business, including finding potential buyers, negotiating the sale proceeds, and taxation advice.
Due diligence
An in-depth analysis of all of the financial aspects of a business, carried out for a purchaser, investor or funder. Due diligence covers both historic and forecast information, management and systems.
E
E-commerce
The buying and selling of products or services over electronic systems such as the Internet and other computer networks. It's generally considered to be the sales aspect of e-business and also consists of the exchange of data to facilitate the financing and payment aspects of the business transactions.
Employee taxation
Tax paid by employees on income earned from their employment.
Environmental auditing
Systematic assessment of a company’s impact on the environment and evaluation of the company’s compliance with legislation or other accepted standards.
Environmental and social due diligence in mergers and acquisitions
Due diligence services to understand social and environmental issues in mergers and acquisitions including: corporate finance, carbon markets transactions, capital markets issues and tax structuring.
Environmental risk assessments
Identifying environmental risks, vulnerabilities and cost implications within a business. Building a clear business case for change or investment and developing risk management strategies and adaptation plans to meet those challenges.
Estate planning and IHT
Planning the most effective and tax efficient way of passing on your wealth to future generations.
Expatriates and non-UK residents
The effect of UK and overseas taxation on UK nationals working overseas.
Expatriates, non-UK residents and non-UK domiciled clients
The effect of taxation/investment/business and general advice on expatriates, non-UK residents and non-UK domiciled clients.
Expert witnesses in litigation/arbitration
To act as an independent expert in legal and arbitration cases where specialist financial comment is required.
F
Feasibility studies
Investigating the viability of a project, both financially and commercially, before the project starts.
Financial planning and advice
How to structure and finance your business; cash flow management; assurance and pensions; acquisitions and sales; and succession planning.
Financial reporting
The preparation of accounts to comply with the statutory requirements and applicable accounting standards.
Flotations
Raising money through the Stock Exchange main market, Alternative Investment Market (AIM) or similar, and the relevant regulatory framework.
Foreign currency transactions
Trading in foreign currencies.
Foreign nationals and non-UK domiciled clients
The effect of UK taxation on non-UK residents.
Foreign subsidiary companies
The preparation of the accounts and advice on the tax implications for foreign companies trading in the UK.
Forensic accounting
Using accounting, auditing and investigative skills to help enquiries which are likely to result in a case in a court of law, and so require knowledge of rules of evidence.
Franchising
All aspects of franchising from both the franchisor and franchisee perspectives.
Fundraising
Helping businesses to raise new debt and equity finance from a variety of sources, including help with developing business plans and projections and negotiating the terms of the deal.
H
Human resources
Advice on staffing issues for employers which might include training, development and employment law.
I
ICAEW Assurance Service
The ICAEW Assurance Service offers audit-exempt companies a viable alternative to accounts compilation. Some companies would like some independent work to be done on their accounts and a conclusion from a chartered accountant on whether any significant matters came out as a result. The Assurance Service primarily consists of analytical reviews and in-depth discussion with management, with substantive work focused on areas of concern. Chartered accountants offering the assurance service follow technical guidance from the Audit and Assurance Faculty and ICAEW ethical requirements. More information.
Information security
Keeping your systems and data secure from unauthorised access or misuse.
Information technology
The design, development, implementation support or management of computer based information systems.
Internal audit
The function, carried out within an organisation, of examining, evaluating and reporting on accounting and other controls on the operations of the organisation.
International Financial Reporting Standards (IFRS)
The preparation of limited liability accounts to international accounting standards.
Insolvency licence
This is one of the areas of accountancy work which are regulated by ICAEW. Where a firm promotes insolvency work, at least one individual at that firm must be a licensed insolvency practitioner. Licensed insolvency practitioners will hold an insolvency licence, issued either by ICAEW or by another recognised professional body (RPB).
Investigations
A critical but constructive examination of any part of your organisation. For example, assessing and negotiating with HMRC on tax underpaid in previous years as a result of failing to provide adequate information about income to the tax authorities.
Investment appraisal
An evaluation of the financial returns arising from an investment (in, for example, a piece of plant) using techniques such as discounted cashflow and return on investment.
Investment Business Authorisation
This is one of the areas of accountancy work which are regulated by ICAEW. Under the Financial Services and Markets Act 2000, firms that wish to recommend specific investment business products have to be authorised to do so by the Financial Services Authority (FSA). ICAEW can license firms to provide a wide range of investment advice, including advice on private company shares and selling investments, and on general insurances where that advice arises out of or is complementary to another accountancy service. The directory indicates which form of authorisation a firm has.
L
Larger company audits
As well as undertaking the audit, advice can be given on Stock Exchange reporting requirements and compliance with accounting standards.
Limited companies
The setting up of a limited company including all relevant aspects of taxation that affect limited companies and limited liability partnerships, including tax on business profits and capital gains.
Limited company accounts
The preparation of accounts of limited companies.
Limited liability partnership
The preparation of accounts of partnerships where one or more partners has limited liability.
Liquidations
Dealing with insolvencies of businesses by which a company ceases and has its assets collected and liabilities satisfied for as the assets will allow.
Loan finance and leasing advice
Whether to borrow and buy an asset or lease it, together with sources of funds.
M
Management accounting consultancy
Establishing an efficient and timely system of reporting on business performance and interpretation of the information provided.
Management advice to business
Financial and other management aspects of managing, controlling and improving the performance of your business.
Management buyouts
Giving a management team advice on all aspects of purchasing the business that employs them.
Management consultancy
Investigation and advice on specific managerial, financial and operational aspects of your business.
Mergers and Acquisitions
All aspects of taking over or merging with another enterprise, including identification of other suitable businesses and negotiating agreements.
N
National Insurance advice
The effect of National Insurance contributions on salary and benefits.
O
Offshore companies
The establishment, administration compliance and taxation of companies domiciled offshore.
Outsourcing - Financial services
Undertaking the processing of transactions on behalf of others eg, insurance, banking, investment and other financial services.
P
Partnerships and sole traders
Setting up as a sole trader or partnership and the ongoing issues including: the tax liability of partnerships and sole traders arising from their business activities.
Partnership/sole trader accounts
The preparation of accounts, for partnerships and sole traders, to comply with the statutory requirements and applicable accounting standards.
PAYE
Help and advice on the Pay As You Earn (PAYE) system of tax collection.
Payroll service and advice
The provision of a payroll service and advice on payroll matters including making the necessary annual returns and meeting payment deadlines.
Pension scheme accounting
Administration of a business pension scheme, which might include a membership database, record of contributions, running bank accounts, paying benefits and preparation of scheme accounts.
Pensions and insurance
Identifying the most suitable pension or insurance arrangements, for a company wishing to establish a pension scheme.
Practice Assurance
Practice Assurance applies to all ICAEW members who hold a practising certificate and who offer accountancy services to the public. These members are required to comply with four published, principles-based standards. ICAEW monitors member firms for compliance with the standards, other relevant regulations and the members’ Code of Ethics.
The ICAEW Directory of Firms also includes firms which are registered with us under the Practice Assurance scheme, but are not necessarily firms of chartered accountants. These firms are monitored under the Practice Assurance scheme.
Property
The impact of taxation on transactions involving land.
R
Reorganisations and company reconstructions
Advice on schemes of rearrangement to help companies through financial difficulties.
Risk management
Profiling the risks faced by a business (such as business interruption and fraud) and developing a strategy for dealing with them.
S
Self assessment
Among many other aspects, this includes advice about record-keeping, tax returns and the systems for the payment of tax.
Small and medium sized businesses
All aspects of taxation for small businesses, such as retailers.
Small and medium sized company audits
To report on the accounts of private companies as an independent auditor.
SME finance
Funding of small and medium sized enterprises and represents a major function of the general business finance market.
Sustainability reporting
Helping organisations to measure and report their sustainability performance to internal and external audiences.
Sustainability strategy design
Developing a sustainability business case and strategy for clients.
Sustainable supply chain performance
How to improve environmental efficiency and reduce the negative social impact of organisations’ supply chain.
T
Taxation
All aspects of tax work for companies and businesses including preparing computations, dealing with HM Revenue & Customs (HMRC) and advising on taxation.
Tax Investigations
Assessing and negotiating with HM Revenue & Customs (HMRC), for example on tax underpaid in previous years as a result of failing to provide adequate information about income to the tax authorities.
Tax planning
How to arrange transactions in the most tax-beneficial manner.
Trusteeship and executorships
Either acting as the named executor in a will or advising executors on the steps to be taken.
Trusts
How trusts are taxed and their use in tax planning.
U
UK companies overseas
The tax implications of UK companies trading overseas.
UK Subsidiaries of overseas multinationals
For UK subsidiaries of overseas multinationals to ensure compliance with UK tax laws.
V
Valuations
Providing guidance and expert opinions on the value of shares, unquoted businesses and other financial instruments.
VAT
Complying with, and the incidence of, VAT on business transactions including preparing and submitting returns on the client’s behalf where requested.
Venture capital
Finance often for new projects where there is a significant element of risk requesting a partial change of ownership. Assistance with sources and proposals for finance.
