Sep

19

Solicitors Regulation Authority decides on the future of Accountant’s Reports

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legalEarlier this year, the Solicitors Regulation Authority (SRA) opened a consultation on the future of accountants’ reports for firms handling client monies. Currently all solicitors which hold client money have to file an accountant’s report within six months of the year-end.

The SRA suggested withdrawing the requirement for solicitors to file an accountant’s report and transferring the responsibility to ensure client money is accounted for in accordance with the SRA Accounts Rules to the Compliance Office for Finance and Administration (COFA). The idea behind this suggestion was to reduce the costs incurred by solicitors on using the services of a professional accountant to report on compliance with the SRA Accounts Rules as well as reducing the administrative burden at the SRA.

The SRA is currently undergoing a programme of regulatory reform and in their meeting on Wednesday 17 September the board of the SRA took further steps to deliver its programme of regulatory reform, one of which concerns the Accountant’s Report and the changes are designed to make them more targeted.

Solicitors will still be required to commission accountant’s reports within six months of their financial reporting period; however only those reports which are qualified will be submitted to the SRA. Firms which receive 100% of the fees from Legal Aid work will not need to commission a report.

In addition, the SRA are simplifying the Overseas Accounts Rules to make it easier for firms with overseas practices to meet the SRA’s requirements.

The next step is for these changes to be agreed by the Legal Services Board prior to them being added to the Handbook.

Category: Audit

About the Author ()

Steve Collings FCCA is a director at Leavitt Walmsley Associates Ltd and the author of over 30 books on the subjects of financial reporting and auditing, including 'IFRS For Dummies' and 'Financial Accounting For Dummies'. More about Steve's publications can be found by clicking on the 'Published Work' tab on the homepage. Steve is also a regular contributor of articles for www.accountingweb.co.uk, the UK's largest resource for professional accountants on a free subscription basis. Steve is trained in both UK and Ireland accounting standards and International Financial Reporting Standards and has lectured overseas on these subjects in the Caribbean and Singapore. Steve works closely with various professional bodies developing technical material, including Technical Factsheets and online courses. He has also served on the UK GAAP Technical Advisory Group at the Financial Reporting Council and works with the country's leading publishers in producing material on the subjects of accounting and auditing (both UK and International). Steve was named 'Accounting Technician of the Year' at the British Accountancy Awards and won 'Outstanding Contribution to the Accountancy Profession' by the Association of International Accountants. Follow Steve on X (Twitter) - @stecollings

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