finance 35 Accountants’ report for law firms to stay
Following a process of consultation, the Solicitors Regulation Authority (SRA) has confirmed that law firms will still be required to commission independent accountants’ reports within six months of the end of their financial reporting period. Adam Wilson, partner at top 20 accountants Wilkins Kennedy LLP, writes
However, in a departure from the current position, only those reports that are qualified will now have to be filed with the SRA. Firms that receive 100 % of their fees from legal aid work will be exempt from needing to commission a report.
The consultation proposal originally put forward by the SRA was that the requirement for every firm that holds client money to have its client account procedures reviewed annually by an external accountant would be removed. This historic requirement was neither proportionate, nor targeted, and was required irrespective of whether the firm posed a high or low risk in respect of the misappropriation of client money. It was also proposed that this approach was unnecessarily costly to the large number of firms that pose only a low risk to consumers of legal services.
activity at the smaller/more local end of the legal sector in the UK, there is no doubt that this is an important objective.
The new SRA requirements will ensure that they will continue to remain informed of firms that have poor compliance with the accounts rules. This should also mean that the risk of negative press arising from legal practices with poor compliance will not affect more compliant firms who strive to ensure their internal client money controls are as robust as possible.
The changes announced within the SRA’s programme of regulatory reform have been considered within the framework of opening the market to new businesses and services and reducing the burden and cost of regulation. Given the level or mergers and acquisition
As part of Wilkins Kennedy’s original response to the consultation, we suggested that the current format of the report should have been considered, perhaps reducing the focus from non-trivial breaches of the rules, while flagging financial issues which formed part of the
Southampton firm reports good year
The Southampton office of accountancy and business advisory firm BDO LLP recently ended its financial year with increased revenues of 6.3%, following continued investment, an influx of new starters and a growing and impressive client base.
Malcolm Thixton, partner and head of BDO in Southampton, said: “We have had a particularly good financial year, and I expect our revenue to increase again next year. Our clients are doing very well and continue to invest in growth, which is good news for this region’s economy and particularly the local jobs market.“
BDO in Southampton has won a number of high-profile clients this year including NATS (National Air Traffic Services) and The Southern Co-Operative, which themselves saw a 7.8% rise in sales this past year.
The firm’s key focus has been the central south mid market where it has identified the top companies expanding internationally, achieving sustainable growth and, shortly, those that best represent the breadth of innovation that can be found in the region.
BDO provides a particularly wide range of support to companies from its Southampton office
and the team has experienced growth in nearly all areas of the business, in addition to tax and audit, corporate finance and risk advisory services have performed particularly well. The corporate finance team has advised on transactions with a combined value of over £300 million in the past 12 months.
Thixton added: “We continue to invest in our people and our offering, and are committed to providing businesses with the very best service around. We have a nearly 200-strong team here in Southampton, giving businesses access to the depth and breadth of expertise they need to flourish.
SRA’s recent drive on financial stability in law firms.
However, we are pleased the SRA has decided to retain the requirement of an annual accountant’s report as it will mean the more compliant firms will be unaffected and users of legal services can have a certain degree of comfort that the firm they have engaged is subject to external review.
However, we do have a certain degree of disappointment that the opportunity to reassess the report in its current format was missed, so we await the next consultation with bated breath.
Details: Adam Wilson 023-8024-7070
Adam.Wilson@wilkinskennedy.com www.wilkinskennedy.com
We anticipate that staff numbers will rise a further 14% in the next 12 months.“
Talking about the challenges facing companies in the region, he added: “Our latest ’Business Trends’ report showed a slight tailing off in business confidence, but this is to be expected as pent-up demand reduces and the focus turns to long-term, sustainable growth.
“The stability of Europe continues to be a big market influencer and the economic impact of the Scottish referendum along with the general election next year, will undoubtedly cause some uncertainty for businesses. It will also be interesting to see what happens when interest rates begin to rise again.“
www.angusthomas.com studio@angusthomas.com
THE BUSINESS MAGAZINE – SOLENT & SOUTH CENTRAL – NOVEMBER 2014
Full Events Service
www.businessmag.co.uk
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