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Broad-Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003)

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Chartered Accountancy Charter

Section C From Theory to Practice: The Scorecard

13. The QSE Scorecard for the CA Sector

13.2 Application of the CA Sector QSE Scorecard

13.2.6 The QSE Enterprise Development Scorecard


Through the indicators listed below, the objective is to measure initiatives intended to assist and accelerate the development and sustainability of other enterprises.


Although some QSEs may have a turnover of little more than R5 million per annum, others in certain industries may well be better positioned to contribute to Enterprise Development than certain of the other Elements. In addition, many successful small business owners are no doubt in a better position than most corporate managers to render and advise Micro and survivalist Enterprises on how to grow and become sustainable. Therefore some QSEs might be well placed to try and address some of the following challenges:

High failure rate amongst black-owned start-ups owing to lack of access to financing and education or experience; and
Job creation.


The indicators and Weighting points are as follows:


QSE Enterprise Development indicator

Weighting points

Compliance Target for 2016


CA sector

Average annual value of all qualifying contributions made by the Measured Entity as a percentage of NPAT or turnover



2% of NPAT or 0,25% of turnover


While recognising the need for the CA sector to contribute to the development of black enterprises, Measured Entities are encouraged to provide support for small black-owned accountancy firms.


In fact, the custom of established audit firms working with black firms on joint projects, with working arrangements ranging from joint assignments which are shared equally between the firms to subcontracting arrangements where an established firm subcontracts part of the work to an emerging black firm, should be extended to the whole sector. At present arrangements of this nature are prevalent in servicing the public sector and in state-owned entities. They are beneficial in that emerging firms are given the opportunity to develop themselves. Established firms are encouraged to extend these arrangements to the private sector as well, and are incentivised by earning points on their scorecards.


For the CA sector, the following are applicable:

2% of NPAT or 0,25% of turnover whichever is the greater. In view of the partnership structure, which is unique to the CA profession, NPAT is not always an appropriate means of measurement, and accordingly turnover was agreed upon as an alternate acceptable measure.


The CA sector shall be entitled to receive recognition for any qualifying Enterprise Development Contributions. It must be possible to quantify such contributions by attaching a monetary value, using a Standard Valuation Method.


Qualifying Enterprise Development Contributions of any Measured Entity shall be measured cumulatively, which shall be from the commencement date of this Sector Code until the date of measurement.


Qualifying Enterprise Development Contributions of the CA sector means capacity building of a monetary and non-monetary nature for black-owned firms within the profession and outside of the profession.


•        Beneficiaries of Enterprise Development defined



Description of Beneficiary


Enterprise Development Category A (QSEs & EMEs)

QSEs and EMEs which are 50% black owned or 50% black women owned


Enterprise Development Category B (any size entity)

Any size entity which is 50% black owned or 50% black women owned 25% black owned or 25% black women owned that also has a B-BBEE Status of level one to six


Sector Specific Programmes

Assistance to black-owned accountancy firm

Job creation through The Hope Factory


Recognition of Enterprise Development Contributions
o Grant contributions to Beneficiary Entities. This would include grants made to the SAICA job creation initiative (The Hope Factory) which is recognised for Enterprise Development purposes.
o Investments in Beneficiary Entities.
o Loans made to Beneficiary Entities.
o Guarantees given or security provided on behalf of beneficiaries.
o Credit facilities made available to Beneficiary Entities.
o Direct costs incurred by a Measured Entity in assisting and backing development of Beneficiary Entities.
o Overhead costs of a Measured Entity directly attributable to Enterprise Development Contributions.
o Preferential credit terms granted by a Measured Entity.
o Preferential terms granted by a Measured Entity in respect of the supply of goods or services to a Beneficiary Entity.
o Contributions made to settling service costs relating to the operational or financial capacity of Beneficiary Entities.
o Payments made by the Measured Entity to third parties to perform Enterprise Development on behalf of the Measured Entity.
o Facilitating access to credit for Beneficiary Entities without which access to similar credit facilities would not be possible.
o Provision of training or mentoring to Beneficiary Entities which will assist the Beneficiary Entities to increase their operational or financial capacity.


Calculation of the value of the benefit


These calculations are based on the Benefit Matrix below:


Qualifying contribution type

Contribution amount

Benefit Factor

Grant and related contribution

Grant contribution

Full grant amount


Direct cost incurred in supporting Enterprise Development

Verifiable cost (including both monetary and non-monetary)


Discounts in addition to normal business practices supporting Enterprise Development

Discount amount (in addition to normal business discount)


Overhead costs incurred in supporting Enterprise Development (including people appointed in enterprise development)

Verifiable cost (including both monetary and non-monetary)


Loans and related contributions

Interest-free loan with no security requirements supporting Enterprise Development

Outstanding loan amount


Standard loan to Black-Owned EME and QSEs

Outstanding loan amount


Standard loan provided to other beneficiary entity

Guarantee amount


Lower interest rate

Outstanding loan amount

Prime rate-actual rate

Equity investments and related contributions

Minority investment in black-owned EME and QSEs

Investment amount


Minority investment in other beneficiary enterprises

Investment amount


Enterprise Development investment with lower dividend to financier

Investment amount

Dividend rate of ordinary shareholders—Actual dividend rate of contributor

Contributions made in the form of human resource capacity

Professional services rendered at no cost and supporting Enterprise Development

Commercial hourly rate of professional


Professional services rendered at a discount and supporting Enterprise Development

Value of discount based on commercial hourly rate of professional


Time of Employees of Measured Entity productively deployed in assisting beneficiaries

Monthly salary divided by 160


Other contributions

Shorter payment periods

Percentage of invoiced amount

Percentage being 15 days less the number of days from invoice to payment


•        Measurement of qualifying contribution



Where    A      =         the score achieved in respect of the qualifying contributions made by the Measured Entity

                B      = the value of all qualifying contributions made by the Measured Entity measured from the effective date of the CA Sector Code to the date of measurement

                 C      =      the compliance Target for qualifying contributions as specified in the scorecard

                 D      =      the Weighting points allocated to the indicators in the scorecard