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Scotland has established a strong reputation as a centre for investment accounting over the last decade, attracting companies like BNP Paribas, Citi, Morgan Stanley and State Street. Once established, these firms have expanded rapidly north of the border, offering accounting services to fund manager clients or for their front office functions elsewhere in the world.

The term investment accounting encompasses various functions that assist fund managers, investment banks and other financial institutions in the buying and selling of securities. These include valuing and pricing funds, reconciling transactions with that of related parties, statutory reporting and client servicing.

Like many 'back office' functions within the financial sector, a high degree of skill is needed to perform these roles. But, the rapid growth of the sector in Scotland has made it difficult to both attract and train new accountants.

Trained accountants are not schooled in investment accounting, while new starts need a crash course in accountancy as well as the investment business and the myriad of products and instruments traded.

Until now companies have delivered this training in-house supported by their own staff acting as mentors. There has been no professional qualification or training course for investment accounting knowledge. While this has served our needs to a degree, companies all require a longer-term approach to ensure a steady pipeline of talent in this area.

Investment accounting is key to the growth of Scotland's financial services industry, and has grown in importance in the current financial climate. We at Scottish Investment Operations have been working with some of the major companies to assess the appetite for a formal qualification to fill the current skills gap.

Our research showed that the firms all wanted to see a formal qualification, which would deliver a strong overview of general accounting and the end-to-end process of accounting for investments. Throughout 2009 we have been working to bring the qualification to market.

The result is the new Diploma in Investment Accounting which, using a combination of distance learning supported by in-house experts, will examine financial accounting, finance, fund accounting and technical accounting.

Until now there had been no formal qualification which acknowledges the professional nature of investment accounting. The new qualification offers training, skills and expertise required to succeed in this important sector. And, although we have developed this in Scotland, the aim is to make the Diploma available internationally.

Alan Thornburrow is chief executive of Scottish Investment Operations. The Diploma in Investment Accounting launches on 10 December and is jointly awarded by Institute of Chartered Accountants of Scotland (ICAS) and the Chartered Institute of Bankers in Scotland (CIOBS). For more information visit www.investmentaccounting.org.uk