Different financial professions handle the monetary needs of corporate. Financial advisors, accountants, wealth managers and auditors manage corporate challenges and investments. Investment opportunities and tax planning are the jobs of a financial advisor. Thinking about the tax implications and planning are the job of an auditor. Financial advisors give consultation on the following matters: tax planning for specific investments, retirement planning, budgeting, and capital market investments. Auditors have a license for the consultation of the corporate tax plan, cost reduction and budgeting. Both professionals deal with numbers. The blog poses an interesting question to the students “which financial advice is close to the chartered accountancy subject? The answer is the comparison between Auditors vs. financial analysts. Financial advisor qualification in India is CA and CMA. The financial advisor qualification required for the global market is CFP and CPA.
Certifications for the financial advisor:
Certified management accountant, chartered financial analyst, Project management professional, ACCA, CGMA, ACAT, GARP, and PMI are the top certifications from global partners for financial analysis. The certifications that are valued in India are chartered financial analyst, chartered mutual fund counsellor, certified financial planner, financial risk manager, and chartered alternate investment analyst. NSE offers certification courses in financial planning and wealth management.
Certifications for auditor:
Financial statement analysis from Intuit, introduction to risk management from New York Institute of finance, risk management from new York institute of finance, the materiality of ESG factors from the University of Pennsylvania, forensic accounting and fraud examination from west Virginia university, and conceptual foundations of auditing from the University of Illinois are some of the global short term certification courses for auditing. ACCA from the United Kingdom, CPA from the United States and Chartered accountancy course from India are the best courses for a 360-degree complete career in accounting and auditing services.
The job of a financial advisor and auditor:
Financial advisors and auditors are the two pillars of the capital markets. The following points illuminate the job profile of the two professionals.
• An auditor is a person or firm recognised by the regulatory body to provide consultancy and check the accounts.
• The chief auditor, vice president of audit, and head of the audit are some of the designations for the auditing experts.
• Chartered accountants are the authorized government auditors for producing audit reports in India.
• Auditors work for internal audit operations, and external audit reports. Internal auditors work with top management. External auditors head the independent CA firms. And produce the auditor reports.
• Financial advisors provide investment advice. They understand the performance of the financial instrument, tax implications, larger financial plans, and the amount required for a financial plan, and review the savings from the investments.
• Financial advisers understand the goals of the investment. The financial goal is time related, realistic, achievable, specific and measurable.
• The portfolio of long-run investment and short-time investment need to change as per the market situations. The financial advisor checks the progress of the investment.
Difference between auditing and advisory services:
• Auditing is providing an opinion about the financial statements.
• Advisory services are providing a solution to the issues.
• Auditing help for improving profits.
• Advisory services help in reaching business objectives.
• Auditing services help to select the financial tools that minimize the risk factors.
• Advisory services improve the internal system and human resource training.
• Forensic auditing help in understanding fraud activities, and reducing the mistakes in future.
• Financial advisory services examine the investment opportunities and savings as per the business model and individual needs.
Why CA course is getting tougher than before?
Reporting models and forensic audits demand a high degree of aptitude. There is a need for technology and data analytics to track the mistakes. NFRA, the reporting authority says that NPAs are the result of financial operations over some time. It is essential to understand the signals at an early stage. Risk parameters signal the problems at an early stage. The regulatory body says that the inclusion of technology helps in understanding the problems at an early stage. AASB is the regulatory body of ICAI that organises an awareness program on the auditing standards. The board also issued the guidance note to the reporting model CARO 2020. In 2017-18 NFRA said that the IL and FS audit express a violation of auditor independence. Now the same regulatory body says that it has differences in the investments also. The amount of investment as on 2018 is 12,320 crore. This amount dominates the balance sheet at 50 per cent. The regulatory body’s findings say that the figures are improper in financial terms. NRFA found a difference in the loans and advances. The wrong usage of brand name, policy documents and e-mail document of EY stood as proof of the auditor’s independence. These cases emphasize the importance of skilled chartered accountants.
Final Words:
Chartered accountants are good at understanding money management. They do not know about open-ended products and close-ended products. They can understand the background of financial instruments and investments. They have restrictions for recommending insurance or mutual fund schemes. They are prohibited to work as commission agents for insurance companies or mutual funds. They calculate the tax amount and advice regarding the saving plans. Chartered accountants are auditors and not financial advisors. The role of auditor and financial advisor is different. The auditor is the authorised professional. A financial advisor is like marketing personnel with deep knowledge about investments. Chartered accountants work in finance, audit, management, and tax consultancy.
