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Comment Sought on Draft CA Sector Code

April 26, 2019

Department of Trade and Industry

26 April 2019

The Draft Chartered Accountancy (CA) Sector Code has been published for comment.

The trade and industry department published the Draft Code in Government Gazette 42417.

The Draft Code follows a review of the Sector Code, published in 2011, to align it with the revised Codes of Good Practice.

At the beginning of 2016, the department announced that the Sector Code had been repealed as the Charter Council had failed to meet the deadline of 15 November 2015 to submit an amended Sector Code.

The CA Sector Code negotiation process was then restarted and final signatures on the Draft Code obtained in September 2018.

The proposed code seeks to grow the number of black people in the chartered accountancy profession to “reflect the country’s population demographics, to empower and enable them to meaningfully participate in and sustain the growth of the economy, thereby advancing equal opportunity and equitable income distribution”.

Objectives include membership of the CA profession to reflect the demographics of South Africa, changing the racial and gender composition of persons on accountancy learnerships, ensuring that training offices are accredited to provide appropriate training, changing racial and gender compositions of ownership and management structures within the CA sector, granting of bursaries to black student to drive skills development and supporting the development and upliftment of local and rural communities via socio-economic development projects.

Priority elements include:


• Ownership – A sub-minimum of 40% of the total weighting points of 6 points for Economic Interest of black CA’s and black people needs to be achieved (40% of 6 points).
• Skills Development – A sub-minimum of 40% of the total weighting points of 30 points for Skills Development needs to be achieved (40% of 30 points).
• Enterprise and Supplier Development – A sub-minimum of 40% for each of the three categories stated below: Preferential Procurement: 40% of 15 points; Supplier Development: 40% of 10 points and Enterprise Development: 40% of 5 points.

Large enterprises must comply with all three priority elements.

Qualifying small enterprises (QSE) need to comply with ownership and one of the other two.

The weighting points per element are 25 points for ownership, 19 points for management control, 30 points for skills development, 30 points for enterprise and supplier development and 5 points for socio-economic development.

In terms of ownership, entities will be expected to have 20% of voting rights in the hands of black CAs and 32.5% economic interest in the entity to which black people are entitled.

As regards management control, entities are expected to have 50% Exercisable Voting Rights of black board members as a percentage of all board members, 60% black employees in senior management as a percentage of all senior management and 44% black female employees in junior management as a percentage of all junior management.

In terms of enterprise and supplier development, entities must have an 80% B-BBEE procurement spend from suppliers based on the B-BBEE Procurement Recognition Levels as a percentage of total measured procurement spend.

The QSE scorecard consists of 25 points for ownership, 15 points for management control, 35 points for skills development, 20 points for enterprise and supplier development and 5 points for socio-economic development contributions.

Comment is invited within 60 days of the date of publication.