Knowledge Centre
1. Professional Engagement Standards
How to protect your reputation and deliver quality services that regulators and clients can trust.
2. Explainer Video (top of page)
In this video
We unpack what professional engagement standards are, why they matter, and how they protect both you and your clients. You’ll hear how applying the correct tax, compilation, assurance, and quality management standards not only keeps you compliant with SARS, CIPC, and regulators but also positions you as a trusted expert. The video highlights real examples of how these standards help you avoid costly mistakes, build credibility, and grow your practice with confidence.
3. What You Need to Know (Definition & context)
Professional Engagement Standards set the rules for how accountants deliver their services. Whether you’re compiling financial statements, preparing tax returns, performing assurance engagements, or managing quality in your firm, these standards provide the framework that ensures your work is ethical, consistent, and legally defensible.
Think of them as your professional safety net: they protect you when SARS, CIPC, or clients ask tough questions about your work. For example, when preparing a set of financial statements, the International Standard on Related Services (ISRS) guides the process so you don’t leave gaps that could cause disputes later. Or, when signing off on assurance, the International Standards on Auditing (ISA) make sure your work stands up to scrutiny.
4. Why It Matters to You (Impact section)
Make money
Applying international standards is not just about ticking compliance boxes, it is a business growth strategy. Clients are increasingly looking for accountants who can give them confidence that their financial statements, tax returns, and assurance reports are credible and defensible. When you demonstrate that your work is backed by ISRS, ISA, and ISQM requirements, you can justify higher fees, attract better-quality clients, and expand into services that add long-term value to their businesses.
Save trouble
Regulators like SARS and CIPC expect professional accountants to apply the correct standards in their work. Ignoring these requirements can lead to penalties, rejected submissions, or even disciplinary action. By embedding professional engagement standards into your daily practice, you protect yourself from unnecessary disputes, strengthen your defence if challenged, and create smoother workflows with fewer errors or rejections. This means less time fixing mistakes and more time focused on building your practice.
Be the trusted expert
Your reputation is your most valuable asset. Clients want more than numbers, they want assurance that their accountant is professional, ethical, and aligned with global best practice. Using professional engagement standards shows you are serious about your role and willing to go beyond the basics. This positions you not just as a service provider, but as a strategic advisor whose work carries weight with banks, investors, and regulators. It’s the difference between being seen as a “bookkeeper” and being recognised as a trusted expert.
5. Frameworks, Standards, or References (if relevant)
Tax
South African Income Tax Act – The primary law governing income tax obligations for individuals and businesses. Every return you submit, deduction you claim, and calculation you make must comply with this Act.
SARS Practice Notes and Guides – These provide interpretation and practical application guidance from SARS. They often clarify how the Act should be applied in real-world scenarios and are essential to keep up with changing compliance requirements.
Compilation
ISRS 4410 (Revised) – Engagements to Compile Financial Statements
This international standard outlines how to prepare financial statements without providing assurance. It ensures that compiled reports are consistent, transparent, and meet the expectations of regulators like CIPC. Applying ISRS 4410 protects you when a client uses compiled statements for funding, tenders, or compliance submissions.
Assurance
International Standards on Auditing (ISAs)
When performing assurance engagements such as audits or independent reviews, ISAs provide the framework for quality and reliability. They set the benchmark for evidence gathering, risk assessment, and reporting. Following ISAs gives stakeholders confidence that financial information can be trusted and withstand regulatory or investor scrutiny.
Quality Management
ISQM 1 – International Standard on Quality Management for Firms
ISQM 1 requires firms to establish a system of quality management, including policies, procedures, and monitoring. It applies to firms of all sizes, even sole practitioners, and is designed to prevent mistakes before they happen.ISQM 2 – Engagement Quality Reviews
This standard complements ISQM 1 by requiring an independent review of high-risk engagements. It’s especially important for practices offering assurance services and ensures accountability and credibility in client work.
Ethics
CIBA Code of Conduct – Every member must adhere to the principles of integrity, objectivity, professional competence, confidentiality, and professional behaviour. This Code aligns with international best practice but is tailored to the South African environment.
IESBA Code of Ethics – The global standard for ethical conduct in the profession, recognised by IFAC. It provides detailed guidance on independence, conflicts of interest, and ethical decision-making, ensuring your practice is consistent with international expectations.
6. How to Apply (Action steps)
6.1 Confirm the service and legal framework
Decide whether the job is Tax, Compilation, Assurance (independent review or agreed upon procedures), or Quality Management. Check what the Companies Act/CIPC/SARS requires for the client, so you don’t over- or under-serve. Record your decision on file.
6.2 Do your ethics & competence checks (document it)
Complete independence/conflict checks, confirm you’re competent for the work, and note safeguards where needed (CIBA/IESBA principles). Save the checklist in the file before you accept the engagement.
6.3 Engagement acceptance & terms (get it signed)
Issue an engagement letter that spells out scope, responsibilities, deliverables, timelines, fees, and limitations.
Tax: add a SARS Power of Attorney and data-provision responsibilities.
Compilation: include ISRS 4410 wording and management’s responsibility for the Annual Financial Statements.
Assurance: include independence, access to information, and management representations.
6.4 Map the job to the right standard
Create a one-page “standards map” in the file: which standard applies and which sections you’ll follow.Tax: Income Tax Act, SARS guides/practice notes.
Compilation: ISRS 4410 (Revised).
Assurance: ISRE 2400 (Revised) for independent reviews; ISRS4400 (revised) for Agreed Upon Procedures.
Quality: ISQM 1 (firm-level system) and ISQM 2 (EQR where required).
6.5 Plan the work and build your file
Open a file index with working papers you’ll need: programs, evidence, conclusions.Tax (examples): client info checklist, year-end reconciliations, deduction support, calculation file, SARS submission proof.
Compilation: business understanding note, FRF selection (IFRS/IFRS for SMEs), management acknowledgement, trial balance tie-outs, disclosures, final Compilation Report.
Assurance: planning memo, materiality/risk assessments, procedures performed, evidence obtained, conclusions, Independent review report draft.
Quality: risk assessment (ISQM 1), responses (policies/procedures), monitoring plan, root-cause log.
6.6 Execute procedures—follow the program, not your memory
Tick through the steps and cross-reference evidence:Tax: reconcile to GL/IRP5s/IT3s, test high-risk deductions, prepare and review returns.
Compilation: read the FS for plausibility, ensure required notes, and obtain management’s final approval.
Assurance: perform planned procedures, update risk if facts change, evaluate misstatements, conclude against criteria.
6.7 Quality checks before you sign
Do a cold-eye review on every file. Trigger an Engagement Quality Review (ISQM 2) for higher-risk jobs (e.g., listed entities, public interest, complex judgments). Document the review date, reviewer, issues raised, and how they were cleared.
6.8 Report correctly and clearly
Use the correct report template and required wording, no improvisation. Date the report when completion and evidence conditions are met. If something limits scope or creates uncertainty, reflect it properly.6.9 Close out and communicate
Send a short management letter (even for compilations) noting control or compliance improvements. Save delivery proofs (SARS/CIPC submissions, client acknowledgement). Record key lessons for future jobs.6.10 Update your system—keep improving
Feed any file findings into your firm’s ISQM 1 monitoring: log non-conformities, do root-cause analysis, fix templates/training, and note CPD needs. Calendar standard updates and review your methodologies at least annually.