diff --git a/alembic/versions/20260622_phase_2_client_acceptance_controls.py b/alembic/versions/20260622_phase_2_client_acceptance_controls.py
new file mode 100644
index 0000000..bc52357
--- /dev/null
+++ b/alembic/versions/20260622_phase_2_client_acceptance_controls.py
@@ -0,0 +1,110 @@
+"""phase_2_client_acceptance_controls
+
+Revision ID: 20260622_phase_2_client_acceptance_controls
+Revises: 20260621_phase_1_udin_final_documents
+Create Date: 2026-06-22
+"""
+from __future__ import annotations
+
+from alembic import op
+import sqlalchemy as sa
+from sqlalchemy import inspect, text
+
+revision = "20260622_phase_2_client_acceptance_controls"
+down_revision = "20260621_phase_1_udin_final_documents"
+branch_labels = None
+depends_on = None
+
+
+CLIENT_TABLE = "clients"
+
+
+def _columns(table_name: str) -> set[str]:
+    bind = op.get_bind()
+    inspector = inspect(bind)
+    if table_name not in inspector.get_table_names():
+        return set()
+    return {col["name"] for col in inspector.get_columns(table_name)}
+
+
+def _add_column_if_missing(existing: set[str], column: sa.Column) -> None:
+    if column.name in existing:
+        return
+    op.add_column(CLIENT_TABLE, column)
+    existing.add(column.name)
+
+
+def _create_index_if_missing(index_name: str, columns: list[str]) -> None:
+    bind = op.get_bind()
+    inspector = inspect(bind)
+    existing_indexes = {idx["name"] for idx in inspector.get_indexes(CLIENT_TABLE)}
+    if index_name not in existing_indexes:
+        op.create_index(index_name, CLIENT_TABLE, columns)
+
+
+def upgrade() -> None:
+    existing = _columns(CLIENT_TABLE)
+
+    _add_column_if_missing(existing, sa.Column("acceptance_status", sa.String(length=30), nullable=False, server_default="pending_review"))
+    _add_column_if_missing(existing, sa.Column("acceptance_required", sa.Boolean(), nullable=False, server_default=sa.true()))
+    _add_column_if_missing(existing, sa.Column("independence_check_completed", sa.Boolean(), nullable=False, server_default=sa.false()))
+    _add_column_if_missing(existing, sa.Column("conflict_check_completed", sa.Boolean(), nullable=False, server_default=sa.false()))
+    _add_column_if_missing(existing, sa.Column("kyc_completed", sa.Boolean(), nullable=False, server_default=sa.false()))
+    _add_column_if_missing(existing, sa.Column("engagement_letter_required", sa.Boolean(), nullable=False, server_default=sa.true()))
+    _add_column_if_missing(existing, sa.Column("engagement_letter_received", sa.Boolean(), nullable=False, server_default=sa.false()))
+    _add_column_if_missing(existing, sa.Column("acceptance_approved_by_user_id", sa.Integer(), nullable=True))
+    _add_column_if_missing(existing, sa.Column("acceptance_approved_at_utc", sa.DateTime(timezone=True), nullable=True))
+    _add_column_if_missing(existing, sa.Column("acceptance_review_notes", sa.Text(), nullable=True))
+    _add_column_if_missing(existing, sa.Column("acceptance_rejection_reason", sa.Text(), nullable=True))
+
+    bind = op.get_bind()
+    dialect = bind.dialect.name
+    if dialect == "postgresql":
+        op.execute(text("UPDATE clients SET acceptance_status = 'pending_review' WHERE acceptance_status IS NULL"))
+        op.execute(text("UPDATE clients SET acceptance_required = TRUE WHERE acceptance_required IS NULL"))
+        op.execute(text("UPDATE clients SET independence_check_completed = FALSE WHERE independence_check_completed IS NULL"))
+        op.execute(text("UPDATE clients SET conflict_check_completed = FALSE WHERE conflict_check_completed IS NULL"))
+        op.execute(text("UPDATE clients SET kyc_completed = FALSE WHERE kyc_completed IS NULL"))
+        op.execute(text("UPDATE clients SET engagement_letter_required = TRUE WHERE engagement_letter_required IS NULL"))
+        op.execute(text("UPDATE clients SET engagement_letter_received = FALSE WHERE engagement_letter_received IS NULL"))
+    else:
+        op.execute(text("UPDATE clients SET acceptance_status = 'pending_review' WHERE acceptance_status IS NULL"))
+        op.execute(text("UPDATE clients SET acceptance_required = 1 WHERE acceptance_required IS NULL"))
+        op.execute(text("UPDATE clients SET independence_check_completed = 0 WHERE independence_check_completed IS NULL"))
+        op.execute(text("UPDATE clients SET conflict_check_completed = 0 WHERE conflict_check_completed IS NULL"))
+        op.execute(text("UPDATE clients SET kyc_completed = 0 WHERE kyc_completed IS NULL"))
+        op.execute(text("UPDATE clients SET engagement_letter_required = 1 WHERE engagement_letter_required IS NULL"))
+        op.execute(text("UPDATE clients SET engagement_letter_received = 0 WHERE engagement_letter_received IS NULL"))
+
+    _create_index_if_missing("ix_clients_acceptance_status", ["acceptance_status"])
+    _create_index_if_missing("ix_clients_acceptance_approved_by_user_id", ["acceptance_approved_by_user_id"])
+
+
+def downgrade() -> None:
+    bind = op.get_bind()
+    inspector = inspect(bind)
+    if CLIENT_TABLE not in inspector.get_table_names():
+        return
+
+    existing_indexes = {idx["name"] for idx in inspector.get_indexes(CLIENT_TABLE)}
+    if "ix_clients_acceptance_approved_by_user_id" in existing_indexes:
+        op.drop_index("ix_clients_acceptance_approved_by_user_id", table_name=CLIENT_TABLE)
+    if "ix_clients_acceptance_status" in existing_indexes:
+        op.drop_index("ix_clients_acceptance_status", table_name=CLIENT_TABLE)
+
+    existing = _columns(CLIENT_TABLE)
+    for col in [
+        "acceptance_rejection_reason",
+        "acceptance_review_notes",
+        "acceptance_approved_at_utc",
+        "acceptance_approved_by_user_id",
+        "engagement_letter_received",
+        "engagement_letter_required",
+        "kyc_completed",
+        "conflict_check_completed",
+        "independence_check_completed",
+        "acceptance_required",
+        "acceptance_status",
+    ]:
+        if col in existing:
+            op.drop_column(CLIENT_TABLE, col)
diff --git a/app/core/startup.py b/app/core/startup.py
index 7363c01..1286ad8 100644
--- a/app/core/startup.py
+++ b/app/core/startup.py
@@ -105,6 +105,8 @@ ROLE_PERMISSION_MAP = {
         "clients.cross_tenant",
         "clients.export",
         "clients.audit_log.view",
+        "clients.acceptance.manage",
+        "clients.acceptance.approve",
         "employees.dashboard.view",
         "employees.view",
         "employees.create",
@@ -227,6 +229,8 @@ ROLE_PERMISSION_MAP = {
         "clients.cross_branch",
         "clients.export",
         "clients.audit_log.view",
+        "clients.acceptance.manage",
+        "clients.acceptance.approve",
         "documents.view",
         "documents.upload",
         "documents.download",
@@ -329,6 +333,8 @@ ROLE_PERMISSION_MAP = {
         "clients.restore",
         "clients.export",
         "clients.audit_log.view",
+        "clients.acceptance.manage",
+        "clients.acceptance.approve",
         "documents.view",
         "documents.upload",
         "documents.download",
@@ -428,6 +434,8 @@ ROLE_PERMISSION_MAP = {
         "clients.activate",
         "clients.export",
         "clients.audit_log.view",
+        "clients.acceptance.manage",
+        "clients.acceptance.approve",
         "documents.view",
         "documents.upload",
         "documents.download",
diff --git a/app/modules/clients/constants.py b/app/modules/clients/constants.py
index 219d4d3..d141aee 100644
--- a/app/modules/clients/constants.py
+++ b/app/modules/clients/constants.py
@@ -27,6 +27,9 @@ CLIENT_TYPES = [
 
 CLIENT_STATUS = ["active", "inactive", "archived"]
 
+CLIENT_ACCEPTANCE_STATUS = ["pending_review", "approved", "rejected"]
+CLIENT_ACCEPTANCE_APPROVAL_REQUIRED_RISKS = {"high", "critical"}
+
 CLIENT_CATEGORY_OPTIONS = [
     "Audit", "Tax", "GST", "Compliance", "Payroll", "Advisory", "Litigation", "Internal", "Other",
 ]
diff --git a/app/modules/clients/models.py b/app/modules/clients/models.py
index 2086dc3..4503e87 100644
--- a/app/modules/clients/models.py
+++ b/app/modules/clients/models.py
@@ -49,6 +49,20 @@ class Client(CommonBase):
     risk_category: Mapped[str | None] = mapped_column(String(50), nullable=True)
     onboarding_date: Mapped[date | None] = mapped_column(Date, nullable=True)
     closing_date: Mapped[date | None] = mapped_column(Date, nullable=True)
+
+    # Client acceptance / continuance controls for AQMM and peer review evidence.
+    acceptance_status: Mapped[str] = mapped_column(String(30), nullable=False, default="pending_review", index=True)
+    acceptance_required: Mapped[bool] = mapped_column(Boolean, default=True, nullable=False)
+    independence_check_completed: Mapped[bool] = mapped_column(Boolean, default=False, nullable=False)
+    conflict_check_completed: Mapped[bool] = mapped_column(Boolean, default=False, nullable=False)
+    kyc_completed: Mapped[bool] = mapped_column(Boolean, default=False, nullable=False)
+    engagement_letter_required: Mapped[bool] = mapped_column(Boolean, default=True, nullable=False)
+    engagement_letter_received: Mapped[bool] = mapped_column(Boolean, default=False, nullable=False)
+    acceptance_approved_by_user_id: Mapped[int | None] = mapped_column(ForeignKey("users.id"), nullable=True, index=True)
+    acceptance_approved_at_utc: Mapped[datetime | None] = mapped_column(DateTime(timezone=True), nullable=True)
+    acceptance_review_notes: Mapped[str | None] = mapped_column(Text, nullable=True)
+    acceptance_rejection_reason: Mapped[str | None] = mapped_column(Text, nullable=True)
+
     notes: Mapped[str | None] = mapped_column(Text, nullable=True)
     gst_applicable: Mapped[bool] = mapped_column(Boolean, default=False, nullable=False)
     income_tax_applicable: Mapped[bool] = mapped_column(Boolean, default=False, nullable=False)
diff --git a/app/modules/clients/schemas.py b/app/modules/clients/schemas.py
index 22a84eb..86c8834 100644
--- a/app/modules/clients/schemas.py
+++ b/app/modules/clients/schemas.py
@@ -12,6 +12,7 @@ from app.modules.clients.constants import (
     CLIENT_TYPES,
     ENGAGEMENT_MODES,
     RISK_CATEGORIES,
+    CLIENT_ACCEPTANCE_STATUS,
 )
 from app.modules.clients.utils import GSTIN_RE, MOBILE_RE, PAN_RE, PIN_RE, TAN_RE, normalize_text, normalize_upper
 
@@ -49,6 +50,15 @@ class ClientBase(BaseModel):
     risk_category: Optional[str] = None
     onboarding_date: Optional[date] = None
     closing_date: Optional[date] = None
+    acceptance_status: str = "pending_review"
+    acceptance_required: bool = True
+    independence_check_completed: bool = False
+    conflict_check_completed: bool = False
+    kyc_completed: bool = False
+    engagement_letter_required: bool = True
+    engagement_letter_received: bool = False
+    acceptance_review_notes: Optional[str] = None
+    acceptance_rejection_reason: Optional[str] = None
     notes: Optional[str] = None
     gst_applicable: bool = False
     income_tax_applicable: bool = False
@@ -72,7 +82,7 @@ class ClientBase(BaseModel):
 
     @field_validator(
         "trade_name", "cin_llpin", "msme_no", "iec_code", "contact_person_name", "contact_person_designation",
-        "address_line_1", "address_line_2", "city", "state", "country", "client_category", "risk_category", "notes",
+        "address_line_1", "address_line_2", "city", "state", "country", "client_category", "risk_category", "acceptance_review_notes", "acceptance_rejection_reason", "notes",
         mode="before",
     )
     @classmethod
@@ -97,6 +107,19 @@ class ClientBase(BaseModel):
             raise ValueError("Invalid engagement mode.")
         return value
 
+    @field_validator("acceptance_status", mode="before")
+    @classmethod
+    def clean_acceptance_status(cls, value):
+        value = normalize_text(value) or "pending_review"
+        return value.lower()
+
+    @field_validator("acceptance_status")
+    @classmethod
+    def validate_acceptance_status(cls, value):
+        if value not in CLIENT_ACCEPTANCE_STATUS:
+            raise ValueError("Invalid client acceptance status.")
+        return value
+
     @field_validator("mobile", "alternate_mobile", mode="before")
     @classmethod
     def clean_mobile(cls, value):
@@ -193,6 +216,15 @@ class ClientUpdate(BaseModel):
     risk_category: Optional[str] = None
     onboarding_date: Optional[date] = None
     closing_date: Optional[date] = None
+    acceptance_status: Optional[str] = None
+    acceptance_required: Optional[bool] = None
+    independence_check_completed: Optional[bool] = None
+    conflict_check_completed: Optional[bool] = None
+    kyc_completed: Optional[bool] = None
+    engagement_letter_required: Optional[bool] = None
+    engagement_letter_received: Optional[bool] = None
+    acceptance_review_notes: Optional[str] = None
+    acceptance_rejection_reason: Optional[str] = None
     notes: Optional[str] = None
     gst_applicable: Optional[bool] = None
     income_tax_applicable: Optional[bool] = None
@@ -209,7 +241,7 @@ class ClientUpdate(BaseModel):
 
     @field_validator(
         "client_name", "trade_name", "cin_llpin", "msme_no", "iec_code", "contact_person_name", "contact_person_designation",
-        "address_line_1", "address_line_2", "city", "state", "country", "client_category", "risk_category", "notes",
+        "address_line_1", "address_line_2", "city", "state", "country", "client_category", "risk_category", "acceptance_review_notes", "acceptance_rejection_reason", "notes",
         mode="before",
     )
     @classmethod
@@ -236,6 +268,21 @@ class ClientUpdate(BaseModel):
             raise ValueError("Invalid engagement mode.")
         return value
 
+    @field_validator("acceptance_status", mode="before")
+    @classmethod
+    def clean_acceptance_status(cls, value):
+        if value is None:
+            return None
+        value = normalize_text(value) or None
+        return value.lower() if value else None
+
+    @field_validator("acceptance_status")
+    @classmethod
+    def validate_acceptance_status(cls, value):
+        if value is not None and value not in CLIENT_ACCEPTANCE_STATUS:
+            raise ValueError("Invalid client acceptance status.")
+        return value
+
     @field_validator("mobile", "alternate_mobile", mode="before")
     @classmethod
     def clean_mobile(cls, value):
@@ -323,6 +370,15 @@ class ClientOut(BaseModel):
     risk_category: Optional[str] = None
     onboarding_date: Optional[date] = None
     closing_date: Optional[date] = None
+    acceptance_status: str = "pending_review"
+    acceptance_required: bool = True
+    independence_check_completed: bool = False
+    conflict_check_completed: bool = False
+    kyc_completed: bool = False
+    engagement_letter_required: bool = True
+    engagement_letter_received: bool = False
+    acceptance_review_notes: Optional[str] = None
+    acceptance_rejection_reason: Optional[str] = None
     notes: Optional[str] = None
     gst_applicable: bool
     income_tax_applicable: bool
diff --git a/app/modules/clients/service.py b/app/modules/clients/service.py
index 0e52772..c3d705b 100644
--- a/app/modules/clients/service.py
+++ b/app/modules/clients/service.py
@@ -2,6 +2,7 @@ from __future__ import annotations
 
 import csv
 import io
+from datetime import datetime, timezone
 
 from fastapi import HTTPException
 
@@ -16,6 +17,7 @@ from app.modules.clients.constants import (
     CLIENT_STATUS,
     CLIENT_TYPES,
     RISK_CATEGORIES,
+    CLIENT_ACCEPTANCE_APPROVAL_REQUIRED_RISKS,
 )
 
 
@@ -25,6 +27,53 @@ def _payload_from_schema(data):
 
 
 
+
+def _is_high_risk(risk_category: str | None) -> bool:
+    return (risk_category or "").strip().lower() in CLIENT_ACCEPTANCE_APPROVAL_REQUIRED_RISKS
+
+
+def _client_acceptance_ready(payload: dict) -> bool:
+    if not payload.get("acceptance_required", True):
+        return True
+    if not payload.get("independence_check_completed"):
+        return False
+    if not payload.get("conflict_check_completed"):
+        return False
+    if not payload.get("kyc_completed"):
+        return False
+    if payload.get("engagement_letter_required", True) and not payload.get("engagement_letter_received"):
+        return False
+    return True
+
+
+def _enforce_client_acceptance_controls(payload: dict, *, existing_row=None):
+    risk = payload.get("risk_category")
+    if risk is None and existing_row is not None:
+        risk = getattr(existing_row, "risk_category", None)
+
+    status = payload.get("status")
+    if status is None and existing_row is not None:
+        status = getattr(existing_row, "status", None)
+
+    acceptance_status = payload.get("acceptance_status")
+    if acceptance_status is None and existing_row is not None:
+        acceptance_status = getattr(existing_row, "acceptance_status", "pending_review")
+    acceptance_status = acceptance_status or "pending_review"
+
+    if _is_high_risk(risk) and status == "active" and acceptance_status != "approved":
+        raise HTTPException(
+            status_code=400,
+            detail="High/Critical risk clients cannot be active until client acceptance is approved by an authorised partner or firm admin.",
+        )
+
+    if acceptance_status == "approved" and not _client_acceptance_ready(payload):
+        raise HTTPException(
+            status_code=400,
+            detail="Client acceptance cannot be approved until independence, conflict, KYC and required engagement letter controls are completed.",
+        )
+
+    return payload
+
 def _ensure_portal_passwords(email: str | None, portal_password: str | None, portal_password_confirm: str | None, *, required: bool):
     email_clean = (email or '').strip().lower()
     pw = (portal_password or '').strip()
@@ -206,6 +255,7 @@ def create_client_service(db, *, data, actor_user_id: int, scope, current_user_r
             raise HTTPException(status_code=400, detail="GSTIN already exists for another client in this tenant.")
 
     payload = _payload_from_schema(data)
+    _enforce_client_acceptance_controls(payload)
     row = repository.create_client(db, payload)
     row = _sync_client_portal_user(db, row=row, portal_password=portal_password, portal_password_confirm=portal_password_confirm)
     _write_association_from_client(db, row, actor_user_id=actor_user_id, current_user_roles=current_user_roles)
@@ -234,6 +284,7 @@ def update_client_service(db, *, row, data, actor_user_id: int, scope, current_u
     )
 
     payload = _payload_from_schema(data)
+    _enforce_client_acceptance_controls(payload, existing_row=row)
 
     if payload.get("pan"):
         existing_pan = repository.get_client_by_pan(db, tenant_id=payload["tenant_id"], pan=payload["pan"])
@@ -305,6 +356,18 @@ def deactivate_client_service(db, *, row, actor_user_id: int):
 
 
 def activate_client_service(db, *, row, actor_user_id: int):
+    payload = {
+        "status": "active",
+        "risk_category": getattr(row, "risk_category", None),
+        "acceptance_status": getattr(row, "acceptance_status", "pending_review"),
+        "acceptance_required": getattr(row, "acceptance_required", True),
+        "independence_check_completed": getattr(row, "independence_check_completed", False),
+        "conflict_check_completed": getattr(row, "conflict_check_completed", False),
+        "kyc_completed": getattr(row, "kyc_completed", False),
+        "engagement_letter_required": getattr(row, "engagement_letter_required", True),
+        "engagement_letter_received": getattr(row, "engagement_letter_received", False),
+    }
+    _enforce_client_acceptance_controls(payload, existing_row=row)
     row = repository.update_client(db, row, {"status": "active"})
     repository.write_audit_log(
         db,
@@ -450,3 +513,78 @@ def reset_client_portal_password_service(db, *, current_user, new_password: str)
     db.commit()
     db.refresh(current_user)
     return current_user
+
+
+def approve_client_acceptance_service(db, *, row, actor_user_id: int, review_notes: str | None = None):
+    payload = {
+        "acceptance_status": "approved",
+        "acceptance_required": getattr(row, "acceptance_required", True),
+        "independence_check_completed": getattr(row, "independence_check_completed", False),
+        "conflict_check_completed": getattr(row, "conflict_check_completed", False),
+        "kyc_completed": getattr(row, "kyc_completed", False),
+        "engagement_letter_required": getattr(row, "engagement_letter_required", True),
+        "engagement_letter_received": getattr(row, "engagement_letter_received", False),
+        "risk_category": getattr(row, "risk_category", None),
+        "status": getattr(row, "status", None),
+    }
+    _enforce_client_acceptance_controls(payload, existing_row=row)
+    now = datetime.now(timezone.utc)
+    updated = repository.update_client(db, row, {
+        "acceptance_status": "approved",
+        "acceptance_approved_by_user_id": actor_user_id,
+        "acceptance_approved_at_utc": now,
+        "acceptance_review_notes": review_notes or getattr(row, "acceptance_review_notes", None),
+        "acceptance_rejection_reason": None,
+    })
+    repository.write_audit_log(
+        db,
+        client_id=updated.id,
+        tenant_id=updated.tenant_id,
+        branch_id=updated.branch_id,
+        actor_user_id=actor_user_id,
+        action="acceptance_approved",
+        summary="Client acceptance approved.",
+        payload_json={"review_notes": review_notes},
+    )
+    return updated
+
+
+def reject_client_acceptance_service(db, *, row, actor_user_id: int, rejection_reason: str | None = None):
+    updated = repository.update_client(db, row, {
+        "acceptance_status": "rejected",
+        "acceptance_approved_by_user_id": None,
+        "acceptance_approved_at_utc": None,
+        "acceptance_rejection_reason": rejection_reason,
+    })
+    repository.write_audit_log(
+        db,
+        client_id=updated.id,
+        tenant_id=updated.tenant_id,
+        branch_id=updated.branch_id,
+        actor_user_id=actor_user_id,
+        action="acceptance_rejected",
+        summary="Client acceptance rejected.",
+        payload_json={"rejection_reason": rejection_reason},
+    )
+    return updated
+
+
+def mark_client_acceptance_pending_service(db, *, row, actor_user_id: int, review_notes: str | None = None):
+    updated = repository.update_client(db, row, {
+        "acceptance_status": "pending_review",
+        "acceptance_approved_by_user_id": None,
+        "acceptance_approved_at_utc": None,
+        "acceptance_review_notes": review_notes or getattr(row, "acceptance_review_notes", None),
+        "acceptance_rejection_reason": None,
+    })
+    repository.write_audit_log(
+        db,
+        client_id=updated.id,
+        tenant_id=updated.tenant_id,
+        branch_id=updated.branch_id,
+        actor_user_id=actor_user_id,
+        action="acceptance_pending_review",
+        summary="Client acceptance moved to pending review.",
+        payload_json={"review_notes": review_notes},
+    )
+    return updated
diff --git a/app/modules/clients/templates/clients/detail.html b/app/modules/clients/templates/clients/detail.html
index 280d999..5835c6c 100644
--- a/app/modules/clients/templates/clients/detail.html
+++ b/app/modules/clients/templates/clients/detail.html
@@ -53,6 +53,12 @@
     </div>
   </div>
 
+  {% if form_errors %}
+  <div class="rounded-2xl border border-rose-200 bg-rose-50 p-4 text-sm text-rose-800">
+    {% for err in form_errors %}<div>{{ err }}</div>{% endfor %}
+  </div>
+  {% endif %}
+
   <div class="grid gap-6 xl:grid-cols-3">
     <section class="rounded-2xl bg-white p-6 shadow-soft xl:col-span-2">
       <h3 class="text-base font-semibold text-slate-900">Profile</h3>
@@ -75,6 +81,78 @@
       </div>
     </section>
 
+    <section class="rounded-2xl bg-white p-6 shadow-soft xl:col-span-2">
+      {% set acc_status = row.acceptance_status or 'pending_review' %}
+      <div class="flex items-start justify-between gap-3">
+        <div>
+          <h3 class="text-base font-semibold text-slate-900">Client Acceptance Controls</h3>
+          <p class="mt-1 text-sm text-slate-500">Embedded AQMM / peer-review evidence for acceptance, independence, conflict, KYC and engagement letter controls.</p>
+        </div>
+        <span class="rounded-full px-3 py-1 text-xs font-semibold {% if acc_status == 'approved' %}bg-emerald-100 text-emerald-700{% elif acc_status == 'rejected' %}bg-rose-100 text-rose-700{% else %}bg-amber-100 text-amber-800{% endif %}">{{ acc_status.replace('_',' ').title() }}</span>
+      </div>
+
+      <div class="mt-4 grid gap-3 md:grid-cols-2">
+        {% for label, ok in [
+          ('Acceptance Required', row.acceptance_required),
+          ('Independence Check', row.independence_check_completed),
+          ('Conflict Check', row.conflict_check_completed),
+          ('KYC Completed', row.kyc_completed),
+          ('Engagement Letter Required', row.engagement_letter_required),
+          ('Engagement Letter Received', row.engagement_letter_received)
+        ] %}
+        <div class="rounded-xl border border-slate-200 px-4 py-3">
+          <div class="text-xs font-semibold uppercase tracking-wide text-slate-500">{{ label }}</div>
+          <div class="mt-1 text-sm font-medium {% if ok %}text-emerald-700{% else %}text-amber-700{% endif %}">{{ 'Yes' if ok else 'No' }}</div>
+        </div>
+        {% endfor %}
+        <div class="rounded-xl border border-slate-200 px-4 py-3">
+          <div class="text-xs font-semibold uppercase tracking-wide text-slate-500">Approved By</div>
+          <div class="mt-1 text-sm text-slate-800">{{ row.acceptance_approved_by_user_id or '-' }}</div>
+        </div>
+        <div class="rounded-xl border border-slate-200 px-4 py-3">
+          <div class="text-xs font-semibold uppercase tracking-wide text-slate-500">Approved At</div>
+          <div class="mt-1 text-sm text-slate-800">{{ row.acceptance_approved_at_utc or '-' }}</div>
+        </div>
+      </div>
+
+      {% if row.acceptance_review_notes %}
+      <div class="mt-4 rounded-xl border border-slate-200 bg-slate-50 px-4 py-3 text-sm text-slate-700">
+        <div class="font-semibold text-slate-900">Review Notes</div>
+        <div class="mt-1 whitespace-pre-wrap">{{ row.acceptance_review_notes }}</div>
+      </div>
+      {% endif %}
+      {% if row.acceptance_rejection_reason %}
+      <div class="mt-4 rounded-xl border border-rose-200 bg-rose-50 px-4 py-3 text-sm text-rose-800">
+        <div class="font-semibold text-rose-900">Rejection / Remediation Notes</div>
+        <div class="mt-1 whitespace-pre-wrap">{{ row.acceptance_rejection_reason }}</div>
+      </div>
+      {% endif %}
+
+      {% if can_approve_acceptance or can_manage_acceptance %}
+      <div class="mt-5 grid gap-3 md:grid-cols-3">
+        {% if can_approve_acceptance %}
+        <form method="post" action="/clients/{{ row.id }}/acceptance/approve" class="space-y-2">
+          <input type="hidden" name="csrf_token" value="{{ csrf_token }}">
+          <textarea name="acceptance_review_notes" rows="2" placeholder="Approval notes" class="w-full rounded-xl border border-slate-300 px-3 py-2 text-sm">{{ row.acceptance_review_notes or '' }}</textarea>
+          <button class="w-full rounded-xl bg-emerald-600 px-4 py-2 text-sm font-semibold text-white hover:bg-emerald-700">Approve Acceptance</button>
+        </form>
+        <form method="post" action="/clients/{{ row.id }}/acceptance/reject" class="space-y-2">
+          <input type="hidden" name="csrf_token" value="{{ csrf_token }}">
+          <textarea name="acceptance_rejection_reason" rows="2" placeholder="Rejection/remediation reason" class="w-full rounded-xl border border-slate-300 px-3 py-2 text-sm">{{ row.acceptance_rejection_reason or '' }}</textarea>
+          <button class="w-full rounded-xl bg-rose-600 px-4 py-2 text-sm font-semibold text-white hover:bg-rose-700">Reject</button>
+        </form>
+        {% endif %}
+        {% if can_manage_acceptance %}
+        <form method="post" action="/clients/{{ row.id }}/acceptance/pending" class="space-y-2">
+          <input type="hidden" name="csrf_token" value="{{ csrf_token }}">
+          <textarea name="acceptance_review_notes" rows="2" placeholder="Pending review notes" class="w-full rounded-xl border border-slate-300 px-3 py-2 text-sm">{{ row.acceptance_review_notes or '' }}</textarea>
+          <button class="w-full rounded-xl border border-amber-300 px-4 py-2 text-sm font-semibold text-amber-800 hover:bg-amber-50">Move to Pending</button>
+        </form>
+        {% endif %}
+      </div>
+      {% endif %}
+    </section>
+
     <section class="rounded-2xl bg-white p-6 shadow-soft">
       <h3 class="text-base font-semibold text-slate-900">Association</h3>
       <div class="mt-4 space-y-2 text-sm text-slate-700">
diff --git a/app/modules/clients/templates/clients/partials/form.html b/app/modules/clients/templates/clients/partials/form.html
index 9424079..2db9e65 100644
--- a/app/modules/clients/templates/clients/partials/form.html
+++ b/app/modules/clients/templates/clients/partials/form.html
@@ -147,6 +147,71 @@
         <input name="country" value="{{ form_data.country or (row.country if is_edit else 'India') }}" class="mt-1 w-full rounded-xl border border-slate-300 px-4 py-2 text-sm">
       </div>
 
+      <div class="md:col-span-2 rounded-2xl border border-amber-200 bg-amber-50 p-4">
+        <div class="flex items-start justify-between gap-3">
+          <div>
+            <h4 class="text-sm font-semibold text-amber-950">Client Acceptance / Continuance Controls</h4>
+            <p class="mt-1 text-xs text-amber-800">Used for AQMM and peer review evidence. High/Critical risk clients cannot be activated until acceptance is approved.</p>
+          </div>
+          {% set acc_status = form_data.acceptance_status or (row.acceptance_status if is_edit else 'pending_review') %}
+          <span class="rounded-full px-3 py-1 text-xs font-semibold {% if acc_status == 'approved' %}bg-emerald-100 text-emerald-700{% elif acc_status == 'rejected' %}bg-rose-100 text-rose-700{% else %}bg-amber-100 text-amber-800{% endif %}">{{ acc_status.replace('_',' ').title() }}</span>
+        </div>
+
+        <div class="mt-4 grid gap-4 md:grid-cols-2">
+          <div>
+            <label class="block text-sm font-medium text-slate-700">Acceptance Status</label>
+            <select name="acceptance_status" class="mt-1 w-full rounded-xl border border-slate-300 px-4 py-2 text-sm">
+              {% for opt in client_acceptance_statuses %}
+              <option value="{{ opt }}" {% if (form_data.acceptance_status or (row.acceptance_status if is_edit else 'pending_review')) == opt %}selected{% endif %}>{{ opt.replace('_',' ').title() }}</option>
+              {% endfor %}
+            </select>
+            <p class="mt-1 text-xs text-slate-500">Formal approval can also be done from the client detail page.</p>
+          </div>
+
+          <div class="flex items-end">
+            <label class="flex items-center gap-2 text-sm text-slate-700">
+              <input type="checkbox" name="acceptance_required" value="1" {% if form_data.acceptance_required is not defined or form_data.acceptance_required or (row.acceptance_required if is_edit else true) %}checked{% endif %}>
+              Client acceptance / continuance review required
+            </label>
+          </div>
+
+          <label class="flex items-center gap-2 text-sm text-slate-700">
+            <input type="checkbox" name="independence_check_completed" value="1" {% if form_data.independence_check_completed or (row.independence_check_completed if is_edit else false) %}checked{% endif %}>
+            Independence check completed
+          </label>
+
+          <label class="flex items-center gap-2 text-sm text-slate-700">
+            <input type="checkbox" name="conflict_check_completed" value="1" {% if form_data.conflict_check_completed or (row.conflict_check_completed if is_edit else false) %}checked{% endif %}>
+            Conflict check completed
+          </label>
+
+          <label class="flex items-center gap-2 text-sm text-slate-700">
+            <input type="checkbox" name="kyc_completed" value="1" {% if form_data.kyc_completed or (row.kyc_completed if is_edit else false) %}checked{% endif %}>
+            KYC completed / verified
+          </label>
+
+          <label class="flex items-center gap-2 text-sm text-slate-700">
+            <input type="checkbox" name="engagement_letter_required" value="1" {% if form_data.engagement_letter_required is not defined or form_data.engagement_letter_required or (row.engagement_letter_required if is_edit else true) %}checked{% endif %}>
+            Engagement letter required
+          </label>
+
+          <label class="flex items-center gap-2 text-sm text-slate-700">
+            <input type="checkbox" name="engagement_letter_received" value="1" {% if form_data.engagement_letter_received or (row.engagement_letter_received if is_edit else false) %}checked{% endif %}>
+            Engagement letter received / accepted
+          </label>
+
+          <div class="md:col-span-2">
+            <label class="block text-sm font-medium text-slate-700">Acceptance Review Notes</label>
+            <textarea name="acceptance_review_notes" rows="3" class="mt-1 w-full rounded-xl border border-slate-300 px-4 py-2 text-sm">{{ form_data.acceptance_review_notes or (row.acceptance_review_notes if is_edit else '') }}</textarea>
+          </div>
+
+          <div class="md:col-span-2">
+            <label class="block text-sm font-medium text-slate-700">Rejection Reason / Remediation Notes</label>
+            <textarea name="acceptance_rejection_reason" rows="2" class="mt-1 w-full rounded-xl border border-slate-300 px-4 py-2 text-sm">{{ form_data.acceptance_rejection_reason or (row.acceptance_rejection_reason if is_edit else '') }}</textarea>
+          </div>
+        </div>
+      </div>
+
       <div class="md:col-span-2">
         <label class="block text-sm font-medium text-slate-700">Notes</label>
         <textarea name="notes" rows="4" class="mt-1 w-full rounded-xl border border-slate-300 px-4 py-2 text-sm">{{ form_data.notes or (row.notes if is_edit else '') }}</textarea>
@@ -161,7 +226,7 @@
         <label class="block text-sm font-medium text-slate-700">Engagement Mode</label>
         <select name="engagement_mode" class="mt-1 w-full rounded-xl border border-slate-300 px-4 py-2 text-sm">
           {% for opt in ['internal_managed','self_tracked','hybrid'] %}
-          <option value="{{ opt }}" {% if (form_data.engagement_mode or (row.engagement_mode if is_edit else 'internal_managed')) == opt %}selected{% endif %}>{{ opt }}</option>
+          <option value="{{ opt }}" {% if (form_data.engagement_mode or (row.engagement_mode if is_edit else ('hybrid' if form_mode == 'firm_admin' else 'internal_managed'))) == opt %}selected{% endif %}>{{ opt }}</option>
           {% endfor %}
         </select>
       </div>
diff --git a/app/modules/clients/ui.py b/app/modules/clients/ui.py
index fc37273..49719cb 100644
--- a/app/modules/clients/ui.py
+++ b/app/modules/clients/ui.py
@@ -10,7 +10,7 @@ from app.core.security.session_auth import get_current_user
 from app.core.templating import templates
 from app.modules.clients import repository
 from app.modules.clients.access import build_scope, can_view_client_row
-from app.modules.clients.constants import CLIENT_CATEGORY_OPTIONS, CLIENT_STATUS, CLIENT_TYPES, RISK_CATEGORIES
+from app.modules.clients.constants import CLIENT_ACCEPTANCE_STATUS, CLIENT_CATEGORY_OPTIONS, CLIENT_STATUS, CLIENT_TYPES, RISK_CATEGORIES
 from app.modules.clients.filters import ClientListFilters
 from app.modules.clients.import_service import (
     build_client_import_template_bytes,
@@ -22,6 +22,7 @@ from app.modules.clients.import_service import (
 from app.modules.clients.schemas import ClientCreate, ClientUpdate
 from app.modules.clients.service import (
     activate_client_service,
+    approve_client_acceptance_service,
     archive_client_service,
     create_client_service,
     deactivate_client_service,
@@ -29,7 +30,9 @@ from app.modules.clients.service import (
     get_client_or_404,
     list_client_audit_logs,
     list_clients_payload,
+    reject_client_acceptance_service,
     restore_client_service,
+    mark_client_acceptance_pending_service,
     update_client_service,
     update_client_self_profile_service,
 )
@@ -77,6 +80,7 @@ def _base_ctx(request: Request, user, db, **ctx):
         "client_statuses": CLIENT_STATUS,
         "client_categories": CLIENT_CATEGORY_OPTIONS,
         "risk_categories": RISK_CATEGORIES,
+        "client_acceptance_statuses": CLIENT_ACCEPTANCE_STATUS,
     }
     base.update(ctx)
     return base
@@ -179,6 +183,15 @@ def _build_form_payload(request: Request, user, scope, *, include_client_code: b
         "risk_category": form.get("risk_category"),
         "onboarding_date": form.get("onboarding_date") or None,
         "closing_date": form.get("closing_date") or None,
+        "acceptance_status": form.get("acceptance_status") or "pending_review",
+        "acceptance_required": _form_bool(form.get("acceptance_required")),
+        "independence_check_completed": _form_bool(form.get("independence_check_completed")),
+        "conflict_check_completed": _form_bool(form.get("conflict_check_completed")),
+        "kyc_completed": _form_bool(form.get("kyc_completed")),
+        "engagement_letter_required": _form_bool(form.get("engagement_letter_required")),
+        "engagement_letter_received": _form_bool(form.get("engagement_letter_received")),
+        "acceptance_review_notes": form.get("acceptance_review_notes"),
+        "acceptance_rejection_reason": form.get("acceptance_rejection_reason"),
         "notes": form.get("notes"),
         "gst_applicable": _form_bool(form.get("gst_applicable")),
         "income_tax_applicable": _form_bool(form.get("income_tax_applicable")),
@@ -535,10 +548,13 @@ def client_new_page(request: Request):
             "status": "active",
             "client_type": "Other",
             "country": "India",
-            "engagement_mode": "internal_managed",
+            "engagement_mode": "hybrid" if form_mode == "firm_admin" else "internal_managed",
             "partner_id": scope.locked_partner_id or getattr(user, "id", None),
             "branch_id": scope.branch_id,
             "tenant_id": scope.tenant_id,
+            "acceptance_status": "pending_review",
+            "acceptance_required": True,
+            "engagement_letter_required": True,
         }
 
         return _render(
@@ -645,6 +661,8 @@ def client_detail(request: Request, client_id: int):
             can_activate=has("clients.activate"),
             can_archive=has("clients.archive"),
             can_restore=has("clients.restore"),
+            can_manage_acceptance=has("clients.acceptance.manage"),
+            can_approve_acceptance=has("clients.acceptance.approve"),
         )
     finally:
         db.close()
@@ -757,6 +775,113 @@ async def client_update(request: Request, client_id: int):
         db.close()
 
 
+@router.post("/{client_id}/acceptance/approve")
+async def client_acceptance_approve(request: Request, client_id: int):
+    db = CommonSessionLocal()
+    try:
+        user = get_current_user(request, db=db)
+        if not user:
+            return RedirectResponse(url="/login", status_code=303)
+        has = _has_perm_factory(db, user)
+        if not has("clients.acceptance.approve"):
+            return _redirect_denied()
+        role_names = _role_names(db, user)
+        scope = build_scope(request, user, has)
+        scope = _elevate_scope_for_system_admin(scope, role_names)
+        form = await request.form()
+        validate_csrf(request, form.get("csrf_token"))
+        row = get_client_or_404(
+            db,
+            client_id=client_id,
+            tenant_id=scope.tenant_id,
+            branch_id=scope.branch_id,
+            allow_cross_branch=scope.allow_cross_branch,
+            allow_all_clients=scope.allow_all_clients,
+        )
+        try:
+            row = approve_client_acceptance_service(db, row=row, actor_user_id=user.id, review_notes=form.get("acceptance_review_notes"))
+            return RedirectResponse(url=f"/clients/{row.id}", status_code=303)
+        except Exception as exc:
+            return _render(
+                request,
+                "modules/clients/templates/clients/detail.html",
+                db,
+                user,
+                title=f"Client • {row.client_name}",
+                row=repository.get_client_detail_payload(db, client_id),
+                audit_logs=list_client_audit_logs(db, row=type("Tmp", (), {"id": client_id})(), limit=10) if has("clients.audit_log.view") else [],
+                scope=scope,
+                can_edit=has("clients.edit"),
+                can_deactivate=has("clients.deactivate"),
+                can_activate=has("clients.activate"),
+                can_archive=has("clients.archive"),
+                can_restore=has("clients.restore"),
+                can_manage_acceptance=has("clients.acceptance.manage"),
+                can_approve_acceptance=has("clients.acceptance.approve"),
+                form_errors=_field_errors(exc),
+            )
+    finally:
+        db.close()
+
+
+@router.post("/{client_id}/acceptance/reject")
+async def client_acceptance_reject(request: Request, client_id: int):
+    db = CommonSessionLocal()
+    try:
+        user = get_current_user(request, db=db)
+        if not user:
+            return RedirectResponse(url="/login", status_code=303)
+        has = _has_perm_factory(db, user)
+        if not has("clients.acceptance.approve"):
+            return _redirect_denied()
+        role_names = _role_names(db, user)
+        scope = build_scope(request, user, has)
+        scope = _elevate_scope_for_system_admin(scope, role_names)
+        form = await request.form()
+        validate_csrf(request, form.get("csrf_token"))
+        row = get_client_or_404(
+            db,
+            client_id=client_id,
+            tenant_id=scope.tenant_id,
+            branch_id=scope.branch_id,
+            allow_cross_branch=scope.allow_cross_branch,
+            allow_all_clients=scope.allow_all_clients,
+        )
+        row = reject_client_acceptance_service(db, row=row, actor_user_id=user.id, rejection_reason=form.get("acceptance_rejection_reason"))
+        return RedirectResponse(url=f"/clients/{row.id}", status_code=303)
+    finally:
+        db.close()
+
+
+@router.post("/{client_id}/acceptance/pending")
+async def client_acceptance_pending(request: Request, client_id: int):
+    db = CommonSessionLocal()
+    try:
+        user = get_current_user(request, db=db)
+        if not user:
+            return RedirectResponse(url="/login", status_code=303)
+        has = _has_perm_factory(db, user)
+        if not has("clients.acceptance.manage"):
+            return _redirect_denied()
+        role_names = _role_names(db, user)
+        scope = build_scope(request, user, has)
+        scope = _elevate_scope_for_system_admin(scope, role_names)
+        form = await request.form()
+        validate_csrf(request, form.get("csrf_token"))
+        row = get_client_or_404(
+            db,
+            client_id=client_id,
+            tenant_id=scope.tenant_id,
+            branch_id=scope.branch_id,
+            allow_cross_branch=scope.allow_cross_branch,
+            allow_all_clients=scope.allow_all_clients,
+        )
+        row = mark_client_acceptance_pending_service(db, row=row, actor_user_id=user.id, review_notes=form.get("acceptance_review_notes"))
+        return RedirectResponse(url=f"/clients/{row.id}", status_code=303)
+    finally:
+        db.close()
+
+
 @router.post("/{client_id}/deactivate")
 async def client_deactivate(request: Request, client_id: int):
     db = CommonSessionLocal()
diff --git a/app/modules/core/rbac/permissions_registry.py b/app/modules/core/rbac/permissions_registry.py
index 27c7b8b..ebc0ef9 100644
--- a/app/modules/core/rbac/permissions_registry.py
+++ b/app/modules/core/rbac/permissions_registry.py
@@ -38,6 +38,8 @@ PERMISSIONS = {
     "clients.cross_tenant": "Manage Clients Across Tenants",
     "clients.export": "Export Clients",
     "clients.audit_log.view": "View Client Audit Logs",
+    "clients.acceptance.manage": "Manage Client Acceptance Controls",
+    "clients.acceptance.approve": "Approve or Reject Client Acceptance",
     "clients.view.own_only": "View Only Own Clients",
 
     "employees.dashboard.view": "View HR Dashboard and Reports",