The Solicitors Regulation Authority has published guidance to explain changes to accountant’s reports which come into effect for accounting periods ending on or after 1 November.
The SRA has been working with the profession for more than a year on how to make accountants’ reports more targeted and relevant for firms and accountants alike. Solicitors’ practices that present little or no risk – such as those firms that do not hold much client money – will now be exempt from obtaining a report from their accountant.
The form that solicitors’ accountants complete each year has also been changed to make use of accountants’ expert analysis. The new forms enable accountants to advise on areas of potential improvement in processes for handling client money, helping to support the form. The new guidance explains the changes.
Crispin Passmore, SRA Executive Director for Policy, said: “This is the second phase of a project aimed at making our regulation more proportionate and targeted. The changes continue our work to remove the obligation for firms deemed low risk to go through the reporting process.
“For those firms that still have the obligation to obtain a report, the changes strengthen the reports by giving accountants more scope to advise firms on how they handle client money. That will help clients and build confidence in law firms. We’ve published the guidance to help firms and their accountants get the most out of the changes we’ve made.”
The guidance sets out what accountants need to consider in their report, factors that might lead to the report being submitted to the SRA, and examples of the types of checks that may be undertaken by the accountants. The new form comes into effect from 1 November.
The guidance can be found here: