Client acceptance and the conflict check
How a firm records client acceptance and a conflict check in Achekam, who approves it, and which due diligence and screening still happen elsewhere.
By Achekam · · 5 min read · For Accountants & audit firms in South Africa, Nigeria, Kenya
The prospect calls on a Thursday: a new holding company, a year-end that has already passed, and a bank that wants audited statements before it renews a facility. The partner wants the work. The question that should come before any engagement letter is whether the firm can accept it: is there a conflict with an existing client, does the firm know who really owns and runs the business, and does it have the people to do the job properly?
ISQM 1 requires firms to have policies for accepting and continuing client relationships, and ISA 220 (Revised) puts the engagement partner on the hook for being satisfied that those policies were followed. The IAASB's page on ISQM 1 describes the standard's wider requirement for a system of quality management tailored to the firm and its engagements. This article explains what Achekam records for acceptance and continuance, and which checks your firm still has to run somewhere else.
Where acceptance is recorded
The acceptance review lives under Quality & Governance, Client Acceptance & Continuance. A firm records the review there after running a conflict check against its own clients and contacts.
There is a second page that looks similar and should be avoided. The Client Acceptance Gateway under Audit & Assurance keeps its cases only in the browser and has no button that opens a new case. A case entered there is not on the server and will not be seen by anyone else. Tell staff to use the Quality & Governance page, and say so in your acceptance procedure.
The conflict check, and its reach
The conflict check runs against the firm's own clients and contacts. That makes it as good as the firm's records. If the prospect's parent company is already a client, or one of its directors is already a contact on another client's record, those are exactly the records the check runs against. If a relationship was never recorded, no check can find it.
Two habits improve the result. Enter the prospect's directors, shareholders and known related entities before running the check, not after. And ask the engagement team, in writing, whether anyone has a personal connection to the prospect; that answer belongs on the acceptance file even when it is "none".
Only a partner approves
Only a signed-in partner can approve the acceptance review. A manager can prepare it, gather the evidence and recommend, but the decision to take on the client, or to continue with one, is recorded against a partner.
On a Nigerian or Kenyan engagement there is a further step. The engagement page shows an Audit Control Tower that includes an acceptance checklist, and that checklist must be approved by a partner other than the person who prepared it before the auditor's report can be approved.
Due diligence is a confirmation, not a check
Customer due diligence in the acceptance review is a tick-box confirmation by the preparer. Achekam runs no automatic FICA, CIPC or sanctions check. The tick records that the preparer says due diligence was done; the evidence of it must be somewhere the firm can produce.
The same applies to screening. Achekam does not screen prospects or clients against sanctions or PEP lists, and the screening row on a prospect's profile always reads NOT RUN. A person's PEP or sanctions status in Achekam is only what staff have recorded.
Compliance records belong elsewhere for now
Achekam does not keep client compliance profiles such as FICA documents, AML risk ratings or PEP screening. The Compliance Profiles page says so, and lists only clients missing a registration or income tax number. Separately, some sub-lists edited in place on a client record, including KYC fields, live only in the browser that entered them.
So keep identity documents, beneficial ownership evidence, risk ratings and screening results in the system your firm already uses for anti-money-laundering records, whether you are working under FICA in South Africa or the equivalent rules in Nigeria or Kenya. Record in the acceptance review where that evidence is held.
| Acceptance step | Where it happens |
|---|---|
| Conflict check against the firm's clients and contacts | Achekam, Client Acceptance & Continuance |
| Acceptance or continuance decision | Achekam, approved by a signed-in partner |
| Acceptance checklist on a Nigerian or Kenyan audit | Achekam Audit Control Tower, approved by a second partner |
| Identity and ownership evidence, FICA or AML records | The firm's own compliance system |
| Sanctions and PEP screening | Outside Achekam; record the result |
| AML risk rating | Outside Achekam |
| Independence of the proposed team | Partly in Achekam; see below |
Continuance is not a formality
Most of a firm's acceptance decisions are continuance decisions. A client that was low risk a few years ago may since have changed owners, taken on a politically exposed director or entered a new industry. Run the conflict check again at each continuance, have the screening repeated outside Achekam, and have the partner approve the continuance review as a fresh decision rather than a copy of last year's.
Acceptance also connects to independence. Achekam records staff declarations and lets anyone check for an active exception, but it does not approve declarations or check the register when people are assigned; the details are in what Achekam records about independence. Where a prospect is high risk, consider whether an engagement quality reviewer should be named from the outset, as described in naming an engagement quality reviewer.
A short acceptance checklist
- Record the prospect, its directors, owners and related entities before running the conflict check.
- Run the conflict check in Client Acceptance & Continuance, never in the browser-only gateway page.
- Complete due diligence and sanctions and PEP screening in your compliance system, and note where the evidence is.
- Ask the proposed team about personal connections and check the independence register.
- Have a partner approve the review; on a Nigerian or Kenyan audit, have a second partner approve the acceptance checklist.
- Only then issue the engagement letter.
Before the next prospect calls
Write down, in one page, which acceptance steps happen in Achekam and which happen in your compliance system, and give it to every manager who prepares acceptance reviews. The split is simple once it is written; it is only dangerous when each person assumes the other system did the check.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
