Financial Glossary
A good understanding of the terms used within the financial industry will go a long way to chosing the right Financial Consultant
- Accountant
- Accountant, or Qualified Accountant, or Professional Accountant, is a certified accountancy and financial expert in the jurisdiction of many countries. Such as other legally-restricted professions including medical doctors and lawyers, different countries have their own training and examination systems to maintain the practice quality and restrict the number of qualified accountants in their jurisdictions. Accountants originally worked only in public practice, selling advice and services to other individuals and businesses, but today, in addition, many work within private corporations, the financial industry and various government bodies. Accountancy is the measurement, disclosure or provision of assurance about financial information that helps managers, investors, tax authorities and other decision makers make resource allocation decisions.
- Auditor
- The most general definition of an audit is an evaluation of a person, organization, system, process, project or product. Audits are performed to ascertain the validity and reliability of information, and also provide an assessment of a system's internal control. Auditing is therefore a part of some quality control certifications such as ISO 9001. The goal of an audit is to express an opinion on the person/organization/system etc. under evaluation based on work done on a test basis. Due to practical constraints, an audit seeks to provide only reasonable assurance that the statements are free from material error. Hence, random sampling is often adopted in audits. In the case of financial audits, a set of financial statements are said to be true and fair when they are free of material misstatements - a concept influenced by both quantitative and qualitative factors.
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- Bookeeper
- A bookkeeper (or book-keeper), sometimes called an accounting clerk in the United States, is a person who keeps the books of an organization. A bookkeeper is usually responsible for writing up the "daybooks". The daybooks consist of purchase, sales, receipts and payments. The bookkeeper is responsible for ensuring that all transactions are recorded in the correct daybook, suppliers ledger, customer ledger and general ledger. The bookkeeper brings the books to the trial balance stage. An accountant may prepare the profit and loss statement and balance sheet using the trial balance and ledgers prepared by the bookkeeper.
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- Chief Financial Officer
- The Chief Financial Officer (CFO) of a company or public agency is the corporate officer primarily responsible for managing the financial risks of the business or agency. This officer is also responsible for financial planning and record-keeping, as well as financial reporting to higher management. (In recent years, however, the role has expanded to encompass communicating financial performance and forecasts to the analyst community.) The title is equivalent to finance director, commonly seen in the United Kingdom. The CFO typically reports to the Chief Executive Officer, and is frequently a member of the board of directors.
- Commercial Banking
- Commercial bank is the term used for a normal bank to distinguish it from an investment bank. This is what people normally call a "bank". The term "commercial" was used to distinguish it from an investment bank. Since the two types of banks no longer have to be separate companies, some have used the term "commercial bank" to refer to banks which focus mainly on companies. In some English-speaking countries outside North America, the term "trading bank" was and is used to denote a commercial bank. After the great depression and the stock market crash of 1929, the U.S. Congress passed the Glass-Steagal Act 1930 (Khambata 1996) requiring that commercial banks only engage in banking activities (accepting deposits and making loans, as well as other fee based services), whereas investment banks were limited to capital markets activities. This separation is no longer mandatory.
- Comptroller/Controller
- A comptroller or controller is a person who supervises cash flow in an organization. A Comptroller is typically a public official responsible for audits government accounts and sometimes certifies expenditures. A Controller is an accountant in a corporation who performs similar functions. In the United States and United Kingdom, a Controller or Financial Controller is a senior position within most companies, often reporting to a Chief Financial Officer.
- CPA
- Certified Public Accountant (CPA) is the statutory title of qualified accountants in the United States who have passed the Uniform Certified Public Accountant Examination and have met additional state education and experience requirements for certification as a CPA. In most U.S. states, only CPAs who are licensed are able to provide to the public attestation (including auditing) opinions on financial statements. The exceptions to this rule are Arizona, Kansas, North Carolina and Wyoming, where although the "CPA" designation is restricted, the practice of auditing is not.
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- Financial Manager/Adviser
- A financial adviser is a professional who renders investment advice and financial planning services to individuals and businesses. Ideally, the financial adviser helps the client maximize their net worth by proper asset allocation. Financial advisers use stocks, bonds, mutual funds and insurance products to meet the needs of their clients. Many financial advisers receive a commission payment for the various financial products that they broker, although "fee-based" planning is becoming increasingly popular in the industry. A further distinction should be made between "fee-based", i.e., they charge fees and collect commissions, and "fee-only" advisors. Fee-only advisors receive 100% of their compensation directly from their clients and have no outside conflicts of interest created by commissions or referral fees paid by other product or service providers.
- Financial Planners
- A Financial Planner or Personal Financial Planner is a practicing professional who helps people to deal with various personal financial issues through proper planning, which includes but not limited to these major areas: tertiary education planning, retirement planning, investment planning, risk management and insurance planning, tax planning, estate planning and business succession planning (for business owners). The work engaged in by this professional is commonly known as personal financial planning. In carrying out the planning function, he is guided by the financial planning process to create a detailed strategy tailored to a client's specific situation, for meeting a client's specific goals.
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- Loan Officers
- Loan officers work for banks and other financial institutions. They help individuals and businesses obtain funds from these lenders. Loan officers specialize in commercial, consumer and mortgage loans. Loan counselors assist loan applicants who have difficulty qualifying for traditional loans
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- Mortgage Bankers & Brokers
- A mortgage broker acts as an intermediary who sources mortgage loans on behalf of individuals or businesses. Traditionally, banks and other lending institutions have distributed their own products. However as markets for mortgages have become more competitive, the role of the mortgage broker has become more popular. Today in most developed mortgage markets (especially the U.S., UK, Australia, New Zealand, Spain and Canada) mortgage brokers are the largest distributors of mortgage products for lenders. The majority of mortgage brokers are regulated to ensure a level of protection for the consumer. The extent of the regulation depends on the jurisdiction.
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- Risk Managers
- Risk managers assess various risks faced by insurance companies. They develop risk policies by analyzing historical data regarding workplace injuries, automobile accidents, natural hazards, and conditions which may result in catastrophic physical and financial loss. For example, they might recommend that a factory add safety equipment, that a house be built to withstand environmental catastrophes, or that incentives be implemented to encourage automobile owners to install air bags in their cars. Because these standards can greatly reduce the probability of loss, risk managers are increasingly important to both insurance companies and the insured.
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- Treasurer
- In corporations, the Treasurer is the head of the corporate treasury department. They are typically responsible for liquidity risk management, cash management, issuing debt, foreign exchange and interest rate risk hedging, securitization, oversight of pension investment management, capital structure, share issuance and repurchase. They also typically advise the corporation on matters relating to corporate finance. They could also have oversight of other areas, such as the purchase of insurance.
