Solicitors: Further consultation on proposed changes to Accountants’ Reports on client monies.
Following a furore over plans to water down the rules for accountants’ reports on law firms’ financial accounts and safeguards for client monies, the Solicitors Regulation Authority (SRA) has launched a second consultation on accountants’ reports, which will be open until 28 January 2015.
This next phase consultation looks at redefining the circumstances in which accountants’ reports are qualified and amendments to the format of the reports. It also considers which areas pose a low risk to clients’ funds and could be excluded from future reporting requirements. This follows an initial consultation on the subject which closed in September and was met with criticism as it removed perceived safeguards particularly around client monies. The SRA has already made some changes to accountants’ reports as part of its regulatory reform programme. As a result law firms now only have to deliver a report to us if it is qualified, while firms that receive 100% of their fees from Legal Aid work do not need to obtain a report.
The SRA will also review the design of the current form which should make it easier for accountants to decide what checks and tests they need to confirm to ensure that client monies are safe.