Changes to the SRA Accountant’s Report that solicitors need to be aware of
November 1st 2015 brought in changes to the SRA Accountant’s Report that solicitors need to be aware of for their accounting periods ending on or after that date.
Firstly, if the amount of monies held in client accounts is below the new limits in an accounting period, an Accountant’s Report does not need to be prepared at all for that period.
The new limits are calculated as follows:
- Looking at the monthly or 5 weekly reconciliations of client funds in the accounting period, the average balance of the reconciliations must be under £10,000 for the period (calculated as the sum of all reconciliation balances divided by the number of reconciliations in the period) and
- The total amount of client funds as shown on the reconciliations in the accounting period must not have exceeded £250,000 on any reconciliation.
If a report is required, note that the new rules have changed the work accountants are required to do so there is more judgement involved in deciding what tests are needed, the extent of testing and what breaches should be reported. Many more firms will now receive reports that are not qualified because the breaches to be reported will only be those where client money was at risk and the breach was material.
Finally, the report will only need to be submitted to the SRA if it is qualified - ie. if it reports on any breaches.
Please telephone Caroline Candy in our Cardiff office if you would like to discuss this or any other matter affecting your practice further. We can run seminars, host discussion groups and provide guidance on the Solicitors Accounts Rules for you and your staff.