IRBA Accredited Registered Auditors in Cape Town

What changed on 1 April 2026

On 25 February 2026, the Minister of Finance announced the most significant changes to South Africa’s small business tax landscape in 17 years. From 1 April 2026:

• The compulsory VAT registration threshold increased from R1 million to R2.3 million
• The voluntary VAT registration threshold increased from R50,000 to R120,000
• The Turnover Tax threshold increased from R1 million to R2.3 million
• The Turnover Tax tax-free threshold increased to R600,000

These changes affect every South African small business with annual turnover between R1 million and R2.3 million. If your business falls in this range, you have decisions to make about your tax registration status.

The three options

Option 1: Deregister from VAT

If your business was previously registered for VAT because its turnover exceeded R1 million, but your annual turnover is now below R2.3 million, you may apply to deregister for VAT.

When to consider this option:

• Your annual taxable supplies are below R2.3 million
• The administrative burden of VAT returns is disproportionate to your turnover
• Your customers are mostly end consumers (not businesses that claim input VAT)
• You want to reduce compliance costs

What deregistration means:

• You stop submitting VAT returns every two months
• You stop calculating output tax and input tax
• You stop collecting VAT from customers on your invoices
• You may need to adjust your pricing (removing 15% VAT from your prices)
• You must apply to SARS for cancellation of your VAT registration using the prescribed process

What to watch out for:

• If your turnover is approaching R2.3 million, you may need to re-register in the near future
• Some customers may prefer dealing with VAT-registered suppliers
• If you are in the construction industry or supply to government, VAT registration may be expected or required by contract

Option 2: Remain registered for VAT voluntarily

You may choose to remain VAT-registered even if your turnover falls below the compulsory threshold. This is called voluntary registration.

When to consider this option:

• Your customers are mostly businesses that claim input VAT
• You supply zero-rated goods or services
• You make significant input VAT claims on business purchases
• You want to maintain your VAT-registered status for commercial reasons

What voluntary registration means:

• You continue to submit VAT returns and account for output and input VAT
• You must still comply with all VAT administrative requirements
• Your turnover must exceed R120,000 per year to remain voluntarily registered
• If your turnover falls below R120,000, you will be required to deregister

Option 3: Register for Turnover Tax

Turnover Tax is a simplified tax system designed specifically for small businesses. It replaces Income Tax, Provisional Tax, Capital Gains Tax, and Dividends Tax with a single tax calculated on your annual turnover.

The Turnover Tax rates from 1 April 2026:

The maximum annual tax on R2.3 million turnover is R39,500.

Who qualifies:

• Sole proprietors
• Partnerships
• Close corporations
• Companies
• Co-operatives
• Annual turnover of R2.3 million or less

What Turnover Tax replaces:

• Income Tax on business profits
• Provisional Tax payments
• Capital Gains Tax on business asset disposals
• Dividends Tax
• VAT (unless you elect to remain in the VAT system)

How to register:

SARS has integrated Turnover Tax registration into the SARS Online Query System (SOQS) from November 2025. You can register online.

How to decide which option is right for your business

The right choice depends on your specific circumstances. Consider these factors:

Your customer base

If your customers are mostly other businesses that need to claim input VAT, remaining VAT-registered may be important for your commercial relationships. If your customers are mostly end consumers, the VAT registration is less relevant to them.

Your input costs

If you make significant input VAT claims on purchases, equipment, or services, deregistering from VAT means you lose those deductions. Calculate whether the input tax you currently claim exceeds the administrative cost of VAT compliance.

Your growth trajectory

If your turnover is approaching R2.3 million, deregistering from VAT now may be short-lived. You may need to re-register within a year or two as your business grows.

Your administrative capacity

VAT returns require two-monthly submissions, accurate record-keeping of output and input tax, and reconciliation of your VAT account. Turnover Tax requires an annual return based on your total turnover. For small businesses with limited accounting resources, the simplicity of Turnover Tax can be significant.

Your pricing

If you deregister from VAT, you need to adjust your pricing. Your prices currently include 15% VAT. After deregistration, you charge your customers without VAT. This may mean your prices stay the same (increasing your net income) or you reduce your prices (maintaining your competitive position). Either way, the change affects your pricing strategy.

What businesses between R1 million and R2.3 million should do now

If your business falls in the R1 million to R2.3 million turnover range, here are the practical steps:

Step 1: Confirm your current turnover

Look at your actual turnover for the past 12 months. Not your projected turnover, not your best month, but your actual annual taxable supplies over the past 12 months.

Step 2: Check your VAT registration status

If you are currently registered for VAT and your turnover is below R2.3 million, you have the option to deregister. If you are not registered for VAT and your turnover is below R2.3 million, you are not required to register.

Step 3: Calculate your Turnover Tax liability

Use the Turnover Tax rates table to calculate what your tax would be under Turnover Tax. Compare this to your current Income Tax liability.

Step 4: Consider the transition

If you are switching from Income Tax to Turnover Tax, or from VAT to no VAT, there are transition issues to consider. You may need to account for output tax on existing stock when you deregister from VAT.

Step 5: Get professional advice

The right choice depends on your specific business circumstances. An accountant or auditor can help you model the financial impact of each option.

The bottom line

The 2026 threshold changes give South African small businesses more flexibility in how they manage their tax obligations. Whether you deregister from VAT, remain registered voluntarily, or switch to Turnover Tax, the key is to make an informed decision based on your actual business circumstances.

The worst thing you can do is nothing. If your turnover has changed, your tax obligations may have changed with it. Review your position, understand your options, and act before your next filing deadline.

SC Audit is an IRBA-registered audit firm based in Bellville, Cape Town. SC Audit’s partners Niel Schoeman, Simone Coetzee, and Hennie Meyer support small businesses with tax planning, VAT compliance, Turnover Tax registration, and financial statement preparation. Contact SC Audit to discuss which option is right for your business.

Frequently Asked Questions

What is the new VAT registration threshold?

From 1 April 2026, the compulsory VAT registration threshold is R2.3 million in annual taxable supplies. The voluntary registration threshold is R120,000. If your annual turnover is below R2.3 million, you are not legally required to register for VAT.

Can I deregister from VAT if my turnover is below R2.3 million?

Yes. If you are currently registered for VAT and your annual taxable supplies fall below R2.3 million, you may apply to SARS for cancellation of your VAT registration. You must go through the prescribed deregistration process.

What is Turnover Tax?

Turnover Tax is a simplified tax system for small businesses with annual turnover of R2.3 million or less. It replaces Income Tax, Provisional Tax, Capital Gains Tax, and Dividends Tax with a single tax calculated on your annual turnover. The first R600,000 of turnover is tax-free.

Should I stay registered for VAT voluntarily?

If your customers are mostly businesses that claim input VAT, or if you make significant input VAT claims on purchases, remaining voluntarily registered may make sense. If your customers are mostly consumers and you do not claim significant input VAT, deregistration may reduce your compliance burden.

How do I register for Turnover Tax?

You can register for Turnover Tax through the SARS Online Query System (SOQS). The registration process has been digitalised since November 2025. You can also visit a SARS branch or use a tax practitioner to assist with registration.

Why trust account audits exist

Certain professions handle money on behalf of clients. Attorneys hold settlement funds, estate agents hold deposit money, and body corporates hold levy contributions. The law requires these professionals to keep that money separate from their own funds, in designated trust accounts, and to have those accounts audited annually.

Trust account audits protect the public. They verify that client money is accounted for, that trust balances match the records, and that the professional has complied with the applicable legislation. Failure to comply can result in disciplinary action, fines, or removal from the register of practitioners.

This article covers the trust account audit requirements for three categories of professionals: attorneys, estate agents, and body corporates.

Attorneys: Legal Practice Act trust account requirements

The legal framework

The Legal Practice Act 28 of 2014 governs the trust account obligations of legal practitioners in South Africa. Section 86 of the Act mandates the maintenance of trust accounts for client funds.

Every attorney who practises for their own account must hold a valid Fidelity Fund Certificate (FFC) under Section 84(1). The FFC is issued by the Legal Practice Council (LPC) and is a prerequisite for lawful practice.

What the audit covers

The trust account audit is conducted in terms of the LPC Rules and the IRBA Guide for Registered Auditors on Engagements on Attorneys Trust Accounts. The auditor examines:

• Whether trust accounts were maintained in compliance with the Legal Practice Act and the LPC Rules
• Whether trust money was deposited promptly into the trust banking account
• Whether trust balances on the bank statements match the trust account records
• Whether interest earned on trust investments was correctly calculated and paid to the Legal Practitioners Fidelity Fund (LPFF) as required by Section 86(5)
• Whether transfers between trust and business accounts were properly authorised and documented
• Whether trust money was used only for the purposes for which it was received

The auditor is also required to consider fraud and theft risks specific to trust accounts, as outlined in the IRBA Guide.

Key compliance requirements

Attorneys must:

• Maintain trust accounts at a South African bank designated as a trust account
• Keep trust money separate from personal or business funds
• Deposit all trust money promptly into the trust banking account
• Maintain accurate trust account records
• Invest surplus trust money in interest-bearing accounts endorsed under Section 78(2A)
• Pay trust interest to the LPFF as required by Section 86(5)
• Submit the auditor’s report to the LPC within the prescribed timeframes

Consequences of non-compliance

The Legal Practice Council takes trust account breaches seriously. Court decisions from 2025 and 2026 illustrate the consequences:

• In LPC v Phogojane (2026), the attorney was struck from the roll for systemic misuse of trust funds and failure to lodge audit reports
• In Naude v LPC (2025), the court considered findings of trust account non-compliance including failure to invest trust monies in endorsed accounts and failure to deposit withdrawn funds promptly

Attorneys have a personal, non-delegable duty to account for all client funds. Ignorance of trust account obligations is not a defence.

Estate agents: Property Practitioners Act trust account requirements

The legal framework

The Property Practitioners Act 2019 (Act No. 22 of 2019) replaced the Estate Agency Affairs Act for estate agents. Section 54 of the Act requires annual trust account audits for business property practitioners who have not been granted an exemption by the Property Practitioners Regulatory Authority (PPRA).

Who must have a trust account audit

All business property practitioners (estate agents) who receive trust money from clients must maintain a trust account and have it audited annually. Exemption may be granted by the PPRA in certain circumstances, but the default position is that an audit is required.

What the audit covers

The auditor examines:

• Whether trust accounts were maintained in compliance with the Property Practitioners Act and its regulations
• Whether trust money was deposited into designated trust bank accounts
• Whether trust balances match the accounting records
• Whether transfers from trust to business accounts were properly authorised
• Whether interest on trust investments was correctly handled

The auditor’s report must be submitted to the PPRA annually as required by the regulations.

Key compliance requirements

Estate agents must:

• Maintain trust accounts designated as trust accounts at a South African bank
• Keep all client money in trust accounts until the transaction is completed
• Not mix trust money with personal or business funds
• Submit the annual audit report to the PPRA within the prescribed timeframe

Body corporates: trust account requirements

The legal framework

Body corporates are established under the Sectional Titles Act 95 of 1986 and governed by the Sectional Titles Schemes Management Act 8 of 2011. The managing agent or trustee of a body corporate is responsible for managing the body corporate’s finances, including trust accounts for levy contributions and other funds.

Trust account obligations

Body corporates that collect levies and hold funds on behalf of owners must:

• Maintain a trust account at a South African bank
• Keep levy contributions and other trust money separate from the body corporate’s general funds
• Maintain accurate records of all trust transactions
• Have the financial statements audited annually as required by the Sectional Titles Schemes Management Act

The audit of a body corporate’s financial statements includes the trust account component. The auditor verifies that trust money was received, held, and spent in accordance with the body corporate’s rules and the applicable legislation.

What the audit covers

The auditor examines:

• Whether levy contributions and other income were correctly recorded in the trust account
• Whether trust money was used only for authorised body corporate expenses
• Whether the trust account balance matches the accounting records
• Whether payments from the trust account were properly authorised
• Whether the body corporate’s financial statements present fairly the trust account transactions

Common themes across all three categories

Despite the different legislative frameworks, the trust account audit requirements share common principles:

Separation of funds. Client money must be kept separate from the professional’s own money. This is the fundamental obligation that underpins all trust account requirements.

Accurate records. Trust account records must accurately reflect all transactions. The auditor relies on these records to verify that trust money was properly handled.

Annual audit. All three categories require annual audit or examination of trust accounts. The audit is not optional, and failure to submit the audit report is itself a compliance breach.

Personal accountability. The professional who holds trust money has a personal duty to account for it. This duty cannot be delegated to staff or the managing agent.

Consequences of non-compliance. Trust account breaches can result in disciplinary action, fines, suspension, or removal from the register. The courts have shown willingness to impose severe penalties for trust account misconduct.

The bottom line

Trust account audits are a legal requirement for attorneys, estate agents, and body corporates in South Africa. They protect client money and verify that professionals comply with their fiduciary duties. The audit process is not a formality. Auditors examine trust account records, bank statements, and transactions to verify that client money was properly handled.

Professionals who maintain accurate trust account records and submit their audit reports on time avoid the disciplinary and legal consequences of non-compliance. Those who fail to comply face increasing scrutiny from regulators and courts.

SC Audit is an IRBA-registered audit firm based in Bellville, Cape Town. SC Audit’s partners Niel Schoeman, Simone Coetzee, and Hennie Meyer support attorneys, estate agents, and body corporates with trust account audits, statutory audits, and compliance services. Contact SC Audit to discuss your trust account audit requirements.

Frequently Asked Questions

Do all attorneys need a trust account audit?

Yes. Every attorney who practises for their own account and holds client funds must maintain a trust account and have it audited annually in terms of the Legal Practice Act 28 of 2014 and the LPC Rules. The auditor’s report must be submitted to the Legal Practice Council within the prescribed timeframe.

Can an estate agent be exempted from a trust account audit?

The Property Practitioners Regulatory Authority may grant exemptions in certain circumstances. However, the default position is that all business property practitioners who receive trust money must have their trust accounts audited annually. Exemption is the exception, not the rule.

What happens if I do not submit my trust account audit report?

Failure to submit the audit report is a breach of the applicable legislation and rules. For attorneys, the LPC can recommend disciplinary action. Court decisions have shown that persistent non-compliance with trust account obligations can lead to suspension or removal from the roll of legal practitioners.

What is the difference between a trust account audit and a financial statement audit?

A trust account audit focuses specifically on whether client money was properly held, recorded, and used in accordance with the applicable legislation. A financial statement audit examines the overall financial position of the business. Both may be required, but they serve different purposes and follow different procedures.

Who can perform a trust account audit?

Trust account audits must be performed by a registered auditor registered with IRBA. The auditor must have the competence to perform engagements on trust accounts as outlined in the IRBA Guide for Registered Auditors.

Why these changes matter for trainees

The Independent Regulatory Board for Auditors has adopted a series of new and revised standards that take effect for audits of financial statements for periods beginning on or after 15 December 2026. These are not minor updates. They change how auditors assess going concern, how they respond to fraud risk, and how they report their findings.

If you are in a SAICA training contract, these standards will apply to the audits you participate in during your articles and beyond. Understanding them now gives you a head start when you begin performing audit procedures under the new framework.

This article explains the key changes, what they mean in practice, and how to prepare.

The three major standard changes

ISA 570 (Revised 2024): Going Concern

The revised going concern standard is the most significant change for audit practice. It strengthens the auditor’s responsibilities when management uses the going concern basis of accounting and introduces new reporting requirements.

What changes:

• The auditor must evaluate whether management’s use of the going concern basis of accounting is appropriate in the preparation of the financial statements
• The auditor must evaluate whether there is material uncertainty related to going concern events or conditions
• New emphasis on the auditor’s responsibilities when management’s going concern evaluation is inconsistent with the auditor’s assessment
• Updated reporting requirements: the auditor’s report must include a clear reference to the going concern section when material uncertainty exists
• Introduction of an Emphasis of Matter paragraph or a Material Uncertainty Related to Going Concern section, depending on the circumstances

In practice, this means more structured documentation of going concern assessment procedures and clearer communication with those charged with governance about going concern conclusions.

ISA 240 (Revised): Fraud in an Audit of Financial Statements

The revised fraud standard responds to well-publicised audit failures and strengthens the auditor’s responsibility for detecting material misstatements due to fraud.

What changes:

• Enhanced requirements for professional scepticism throughout the audit
• Revised requirements for evaluating the risk of material misstatement due to fraud, including consideration of how fraud may be concealed
• Updated requirements for responding to assessed fraud risks, including the design and implementation of further audit procedures
• New requirements for communications with those charged with governance about fraud
• Clarified requirements for evaluating misstatements to determine whether they may be indicative of fraud

The standard emphasises that audit procedures that are effective for detecting errors may not be effective for detecting fraud. Auditors must think about how fraud could be concealed, not just whether it has occurred.

Narrow-scope amendments to ISQMs, ISAs, and ISRE 2400

The IRBA also adopted narrow-scope amendments arising from the IESBA’s Using the Work of an External Expert project. These amendments affect:

• International Standards on Quality Management (ISQMs): Updated requirements for firms when using the work of an external expert in quality management
• ISAs: Clarified requirements for auditors when using the work of an expert in an audit engagement
• ISRE 2400 (Revised): Updated requirements for independent reviews when using the work of an expert

These amendments are smaller in scope but important for audit firms that engage specialists, which is common in audits of companies with complex valuations, actuarial calculations, or IT systems.

The updated SAAPS 3: Illustrative Reports

The IRBA published an Exposure Draft of the proposed SAAPS 3 (Revised XXX 2026) in June 2026, with comments due by 7 August 2026. The final version is expected to be approved in November 2026.

SAAPS 3 provides practical guidance to registered auditors on the content and format of auditor’s reports in South Africa. The proposed revision contains 32 illustrative reports covering both audits and independent reviews.

Key changes in the illustrative reports:

• Updated templates to reflect the new going concern reporting requirements under ISA 570 (Revised 2024)
• Updated templates to reflect the revised fraud reporting under ISA 240 (Revised)
• Introduction of Appendix 1(b) explaining the interaction between the IRBA’s Enhanced Auditor Reporting Rule and the going concern reporting requirements
• An additional illustrative report for companies applying IFRS 19 (Subsidiaries without Public Accountability: Disclosures)
• Editorial improvements updating references to the latest standards

For trainees, the illustrative reports are the practical bridge between the standards and the audit report you help prepare. Familiarising yourself with the new templates prepares you for what the final report should look like.

Sustainability assurance: ISSA 5000 and the IRBA Code

In February 2026, the IRBA adopted ethics standards for sustainability assurance, including independence standards, through Board Notice 911 of 2026. These standards introduce a new Part 5 to the IRBA Code of Professional Conduct, establishing a framework of ethics and independence requirements for sustainability assurance engagements.

The standards are designed to be equivalent to Part 4A of the IRBA Code (which applies to financial statement audits) and apply the same high ethical and independence principles.

ISSA 5000, General Requirements for Sustainability Assurance Engagements, has been adopted but is not yet effective. It is included in the 2025 Handbook Volume III. When it becomes effective, registered auditors in South Africa will be able to perform sustainability assurance engagements under a recognised framework.

For trainees, this is a career-shaping development. Sustainability assurance is a growing field, and the IRBA’s adoption of these standards means South African auditors will be at the forefront of this expanding area of practice.

The Enhanced Auditor Reporting Rule

The IRBA’s Enhanced Auditor Reporting Rule is already in effect for audits of Public Interest Entities. The rule requires enhanced content in the auditor’s report, including:

• Key Audit Matters (KAMs): Disclosure of the matters that, in the auditor’s professional judgment, were of most significance in the audit
• Enhanced description of the auditor’s responsibilities
• Enhanced description of the scope and objective of the audit

The proposed SAAPS 3 (Revised) includes Appendix 1(b), which explains how the Enhanced Auditor Reporting Rule interacts with the new going concern reporting requirements. This is important for PIE audits where both the rule and the revised standard apply.

IAASB proposals on the horizon

The International Auditing and Assurance Standards Board has also issued for public consultation proposed revisions to three core ISAs: ISA 330, ISA 500, and ISA 520. These proposals aim to modernise the risk-based audit framework and address automated tools and technological advances.

Key elements of the proposed revisions:

• Technology-neutral principles for deploying automated tools and data analytics
• Clarified requirements for designing and executing tests of controls, substantive procedures, and substantive analytical procedures
• Standardised concepts connecting risk assessment, risk response, and evaluation of audit evidence

These proposals are still at the exposure draft stage and have not yet been adopted by the IRBA. However, they signal the direction of audit standard-setting and the increasing role of technology in audit methodology.

What this means for SAICA training contract students

During your articles

The revised standards apply to audits for periods beginning on or after 15 December 2026. If your training office begins its audit season after that date, you will be working under the new framework from the start.

Focus areas during your articles:

• Understand the revised going concern assessment procedures and documentation requirements
• Learn the enhanced fraud risk assessment and response procedures
• Familiarise yourself with the new illustrative report formats
• Understand when and how to apply professional scepticism in the context of fraud detection

For your board exams

The SAICA board exams reflect current standards. The revised ISAs will feature in upcoming examination cycles. Key topics to master:

• Going concern: assessment procedures, management’s responsibilities, auditor’s reporting obligations
• Fraud: risk assessment, response to assessed risks, communication with those charged with governance
• Audit evidence: sufficiency and appropriateness, use of experts, automated tools
• Reporting: modified opinions, emphasis of matter, material uncertainty related to going concern

For your career

The audit profession is evolving. Sustainability assurance, technology-driven audit methodology, and enhanced reporting are reshaping what auditors do and how they do it. Understanding these trends early positions you for a career that keeps pace with the profession’s development.

The bottom line

The 2026 IRBA standards changes are the most significant updates to the auditing framework in recent years. They affect how auditors assess going concern, how they respond to fraud risk, how they use experts, and how they report their findings. For SAICA trainees, understanding these changes now is an investment in your professional development.

SC Audit is an IRBA-registered audit firm based in Bellville, Cape Town. SC Audit is a SAICA-accredited training office. SC Audit’s partners Niel Schoeman, Simone Coetzee, and Hennie Meyer support training contract students with practical experience across statutory audits, independent reviews, and assurance services. Contact SC Audit to learn more about the training programme.

Frequently Asked Questions

When do the new IRBA standards take effect?

The revised standards apply to audits of financial statements for periods beginning on or after 15 December 2026. Early adoption is permitted but requires full application of ISA 570 (Revised 2024), ISA 240 (Revised), and the narrow-scope amendments across the entire engagement.

What is the biggest change in the revised going concern standard?

ISA 570 (Revised 2024) strengthens the auditor’s responsibility for evaluating management’s use of the going concern basis of accounting and introduces new reporting requirements. When material uncertainty exists, the auditor must include a clear reference in the report, either as an Emphasis of Matter paragraph or a Material Uncertainty Related to Going Concern section.

How does the revised fraud standard affect audit procedures?

ISA 240 (Revised) enhances requirements for professional scepticism and requires auditors to consider how fraud could be concealed, not just whether it has occurred. Audit procedures effective for detecting errors may not be effective for detecting fraud, so auditors must design procedures that address fraud-specific risks.

What is sustainability assurance and why does it matter?

Sustainability assurance is the independent verification of sustainability reports and disclosures. The IRBA has adopted ISSA 5000 and ethics standards for sustainability assurance, which will allow South African auditors to perform these engagements. It is a growing field that expands the scope of audit practice.

What should SAICA trainees focus on first?

Start with the revised going concern and fraud standards, as these affect the most common audit procedures. Familiarise yourself with the new illustrative report formats in SAAPS 3. Understand the interaction between the Enhanced Auditor Reporting Rule and the new going concern requirements for PIE audits.