The principle of professional competence and due care means you should only take on work you have, or can obtain, the knowledge and skill to do properly. Specialist work is not forbidden, but the Code of Ethics expects you to assess competence before accepting, and to close any gap with training, experienced people, more time or an outside expert, or to decline.

What does the competence principle require?

Professional competence and due care is one of the five fundamental principles. Under R113.1 of the ICAEW Code of Ethics 2026 a professional accountant must:

  • attain and maintain professional knowledge and skill at the level required to ensure the client receives competent professional service, based on current technical and professional standards and relevant legislation; and
  • act diligently and in accordance with applicable technical and professional standards.

Two further requirements follow. R113.2 says you must take reasonable steps to ensure that people working under your authority have appropriate training and supervision. R113.3 says that, where appropriate, you must make clients aware of the limitations inherent in the work and explain what those limitations mean.

The application material makes the point that maintaining competence requires continuing awareness of technical, professional, business and technology developments, which is why CPD sits alongside this principle.

When does the question arise at engagement stage?

Section 320 of the Code deals with professional appointments. Paragraph 320.3 A3 says a self interest threat to competence and due care is created if the team does not have, or cannot acquire, the competencies needed to perform the service. The factors for judging how serious that threat is (320.3 A4) include:

  • an understanding of the client’s business, the complexity of its operations, and the purpose, nature and scope of the work;
  • knowledge of relevant industries or subject matter;
  • experience with relevant regulatory or reporting requirements;
  • the firm’s quality management policies and procedures; and
  • whether the fee has regard to the resources the work needs.

The safeguards the Code gives (320.3 A5) are assigning enough people with the necessary competencies, agreeing a realistic timetable, and using experts where necessary. The fee factor is worth noting: pricing a complex job at a routine rate is itself a warning sign.

What are the typical “outside expertise” situations?

  • a long standing bookkeeping client asks for help with a share scheme, a demerger or an EMI valuation;
  • a client inherits property abroad or becomes non UK resident;
  • a client needs a VAT partial exemption calculation or advice on the option to tax;
  • an owner managed business moves from FRS 105 to full FRS 102, or acquires a subsidiary needing group accounts;
  • a charity or academy client with sector specific reporting rules;
  • a client wants a valuation, expert witness report or forensic work.

None of these is out of bounds for a general practice. The question is whether you can bring the work up to the standard a competent specialist would achieve.

How do you use an expert safely?

R320.10 requires you to decide whether the use of an expert’s work is appropriate for the intended purpose. Paragraph 320.10 A1 lists factors including the expert’s reputation, expertise and resources, and whether the expert is subject to professional and ethics standards. Prior association with the expert, or asking others about them, helps.

In practice:

  1. agree in writing what the expert will do and who the client is for that advice;
  2. check how the expert’s work will be relied on and whether their terms limit that;
  3. keep enough understanding to explain the advice to the client and spot obvious gaps;
  4. deal with confidentiality before sharing client data, and get client consent where required.

The same approach applies to technology. R320.11 requires you to decide whether using the output of technology is appropriate, and 320.11 A1 asks whether you have the ability, or access to an expert with the ability, to understand and explain that technology. Relying on software or an AI tool you cannot evaluate is a competence problem, not just a systems problem.

What does PCRT add for tax work?

PCRT, effective from 1 January 2026, applies to members of the bodies that issue it when they do tax work. Paragraph 2.13 says a member must not undertake professional work they are not competent to perform unless they obtain appropriate assistance from a suitably qualified specialist. Paragraph 2.10 says members should not stray beyond the agreed terms; if they do, they should agree revised terms with the client and check that their professional indemnity insurance covers the extra work. Paragraph 2.14 suggests considering a second opinion for significant advice, with due regard to confidentiality if it is obtained externally; see second opinions.

In the Code’s tax planning section, paragraph 380.19 A3 lists referring the client to an expert outside the firm with the necessary expertise as one action that might eliminate threats arising from a tax planning arrangement.

What if you cannot close the gap?

Then the honest options are to decline the work, to carve it out of your engagement and refer the client, or to work alongside a specialist whom the client engages directly. Record the decision in the engagement letter scope, including what you are not doing, so that R113.3 is met and the client knows to look elsewhere. Exclusions work only if they are clear and the client actually understands them.

The Code also warns, in its section for accountants in business, that you should not intentionally mislead an employer about your level of expertise, and points to Section 270 on pressure where someone pushes you to act in a way that might breach the competence principle.

How might this play out?

Illustration only. A two partner firm acts for a family company. The directors want to give a key employee shares and ask the firm to “sort out the paperwork”. The firm has done share issues before but never an employment related securities valuation or an HMRC notification for an option scheme.

  • At acceptance, the engagement partner notes the gap against 320.3 A4 and the fee implications.
  • The firm agrees with the client that a specialist share schemes adviser will value the shares and advise on the scheme, engaged by the client directly.
  • The firm handles the company law filings and the accounting entries, which it is competent to do.
  • The engagement letter is updated to exclude scheme design and valuation, and the file records the reasoning.

What mistakes do practitioners make?

  • Drifting into specialist work through an informal phone call or email answer that a client then relies on.
  • Delegating without supervision, in breach of R113.2, for example leaving a junior to research an unfamiliar relief.
  • Not checking insurance. PCRT expressly ties scope creep to checking professional indemnity cover; see professional indemnity insurance for accountants.
  • Treating an expert’s report as a black box without assessing whether it is fit for purpose under R320.10.
  • Keeping a client out of loyalty when their affairs have outgrown the firm. A planned handover through professional clearance serves the client better than struggling on.

See also the fundamental principles of the code of ethics.

Solar Protect runs fee protection schemes for accountancy and bookkeeping practices. See how our accountant schemes work or read fee protection schemes for accountants.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.