B-BBEE Affidavits: Why CIBA Members Must Treat Them as Agreed-Upon Procedures Engagements

Many small businesses in South Africa qualify to submit a B-BBEE affidavit instead of a full verification certificate. For EMEs, Black-owned QSEs, start-ups and certain co-operatives, the affidavit is the official B-BBEE level confirmation.

But when a CIBA member helps a client prepare or confirm this affidavit, it is not an audit, not a review, and not a “quick signature” favour. It is a professional engagement that must be performed in terms of the Agreed-Upon Procedures Standard (ISRS 4400 Revised). This protects you as the practitioner, protects the client, and ensures the document holds up under verification, tender reviews, bank applications and regulatory checks.

1. Why an AUP Engagement Is Required

A B-BBEE affidavit requires the practitioner to confirm factual information such as:

• Annual turnover
• Percentage of Black ownership
• Whether the business qualifies as an EME, QSE, or start-up
• Sector code applicability

This involves specific factual checks that must be performed and reported exactly as they were done. ISRS 4400 (Revised) describes an AUP engagement as one where:

• The practitioner performs procedures agreed with the client
• The practitioner reports factual findings only
• No assurance is provided

This is perfectly aligned with B-BBEE affidavits. You are not expressing an opinion on the client’s B-BBEE status; you are confirming factual information and reporting what you found.

2. What an AUP Engagement Means in Practice

When you help a client with a B-BBEE affidavit, you must follow these step-by-step principles:

a) Agree the procedures with the client (before starting)

ISRS 4400 requires that:

• The client understands what you will check
• You agree on the exact procedures to perform
• You record these procedures in an engagement letter

b) Perform only the agreed procedures

You cannot add your own judgement or opinion, nor can you confirm “reasonability”, “compliance”, or “fairness”. You only report what you tested and what you found.

c) Report factual findings

Your AUP report must include:

• Each procedure you performed
• The exact findings for each procedure
• Any exceptions found

d) No assurance

You must clearly state this is not an audit, not a review, and you express no opinion or conclusion. This protects you from liability and misunderstanding.

3. What Procedures Should You Perform for a B-BBEE Affidavit?

Below is a practical, CIBA-friendly procedure set you can use and adapt.

a. Confirm Annual Turnover

• Obtain management accounts or AFS.
• Inspect revenue totals for the latest financial year.
• Compare the turnover to the thresholds:
  • ≤ R10 million → EME
  • R10–R50 million → QSE (note: affidavits allowed only for Black-owned QSEs)

b. Verify Black Ownership Percentage

• Inspect the share register or membership register.
• Inspect ID documents of shareholders or members.
• Calculate the percentage legally and beneficially held.

c. Confirm Sector Code

• Inspect the client’s primary business activity.
• Compare to the official sector code lists (e.g., Construction, Tourism, ICT).

d. Confirm Qualifying Status

• If start-up → less than 1 year old?
• If co-operative → turnover threshold met?
• If QSE → is the ownership ≥51% or 100% Black-owned (required for affidavit use)?

e. Prepare the Affidavit Based on Verified Facts

You are not giving a B-BBEE opinion—only confirming the facts.

4. What Your AUP Report Must Contain

According to ISRS 4400, your report must include the following mandatory elements:

• Title: “Agreed-Upon Procedures Report on B-BBEE Affidavit Verification”
• Addressee (usually the client)
• Purpose of the report
• Statement that the report may not be suitable for another purpose
• Statement that this is not an assurance engagement
• Ethical compliance statement
• Independence statement (if applicable)
• Description of each procedure & findings for each procedure
• Signature, date, and practitioner details

5. Why This Matters for CIBA Members

B-BBEE affidavits are increasingly scrutinised by banks, government procurement teams, large corporates, and verification agencies. Incorrect affidavits can lead to client penalties, disqualification from tenders, reputational damage, and practitioner liability.

Using ISRS 4400 protects you because:

• You followed a recognised international standard
• You did not express an opinion
• Your work is limited to factual findings only
• Your procedures are clearly documented

Conclusion

B-BBEE affidavits may look simple, but they require a proper professional approach. By treating the work as an Agreed-Upon Procedures engagement under ISRS 4400, CIBA members protect themselves, deliver higher-quality work, ensure clients have valid defensible affidavits, and build trust with regulators and stakeholders.