Good news for law firms? SRA Board supports relaxing Reporting Accountants’ Report Requirements

20 July 2015

According to the SRA, its decision to make changes to the format of the accountants’ report and to the criteria upon which these should be qualified and thus require submission is set to “improve their value and reduce the burden on (Law) firms”. In the SRA Board meeting held on 15th July 2015 it was agreed that Accountants will now be able to use their “professional judgment to assess if the firms they report on have substantively complied with the SRA account rules”. The hope is to remove qualified reports resulting from ‘trivial breaches of the rules’ so that accountant’s can target their work to ‘focus on risks to client money’ at the same time as using their expertise to advise on potential risks, thereby delivering ‘value for money’.

The intention is that accountant’s should ensure the work they undertake is both proportionate and targeted to the size of firm and the nature of work the firm undertakes, so by definition this will be case specific. It should not come as a surprise therefore that for some firms this may mean increased cost!

That said, the SRA recognise that where smaller firms hold smaller amounts of client money and are of relatively low risk, then it is appropriate to exempt them from the accountants’ report requirement completely. Thus, firms with an average client balance of less than £10,000 a year and a maximum account balance of £250,000 will be exempted.

These proposed changes though will still need approval by the Legal Services Board prior to their implementation as part of Version 15 of the SRA Handbook that will be published on 1st November 2015.

Contact us

To discuss your specific circumstances please contact a member of our specialist Legal sector team or send us an enquiry online.