law south east 9


Protecting client money – what next for the SRA accounts rules


2014 was a year which threatened much change for the SRA Accounts Rules but ultimately had very little impact for the vast majority of law firms, writes Tommy White, partner at Wilkins Kennedy


The question that is undoubtedly on every COFA’s lips (or not) is what does the Solicitors Regulation Authority next have in store for the accounts rules?


The SRA is reviewing the operation of the accounts rules as part of its wider programme of regulatory reform, which they say is “designed to ensure that regulation is proportionate and targeted, with the aim of reducing unnecessary regulatory burdens, while providing appropriate levels of consumer protection”.


In the summer of 2014 following a process of consultation, the SRA confirmed that the proposal for firms to no longer deliver accountants reports was to be abandoned, pending a more thorough review of the rules themselves. The main changes implemented were that only


qualified reports would be required to be submitted with the SRA, and that firms that received 100% of their fees from legal aid work were to be exempt from needing to commission a report in the future.


The SRA also announced a phased approach to looking at the operation of the accounts rules going forward. Having implemented phase one in October 2014, the next phase would start in April 2015.


The latest consultation, which closed in January, included a significantly reduced format of accountants report and effectively proposed the removal of the prescribed testing procedures required to be undertaken by the reporting accountant, with the onus being on the accountancy firm to utilise their professional judgement in


determining which tests needed to be completed. As part of the proposed new format of the report, the reporting accountant is required to comment on whether they did, or did not, identify deficiencies in the firm’s systems, and then outline the nature of those deficiencies.


As part of their response to the consultation, Wilkins Kennedy flagged this lack of guidance and use of professional judgement, as being a potential risk area, not only in terms of the potential for inconsistency in reporting by different reporting accountants but also with regards to assistance for compliance officers in determining control issues in their systems and what breaches were reportable to the SRA.


In February, The Law Society also echoed this view, particularly


flagging up that “accountants would need guidance on what might qualify as a serious deficiency”.


The ongoing drive by the SRA to ensure that firms are not having to meet an excessive regulatory burden should be maintained, and therefore the proposed phased approach to reviewing the existing accounts rules, including exploring the removal of certain rules should assist in meeting that objective.


If the SRA, with the help of the legal firms themselves, and other key stakeholders, are able to streamline the rules further, whilst maintaining the focus on the key areas in terms of protection of client money and fraud, then clearly this will be a pleasing outcome for all involved.


Details: Tommy White 01784-435561 tommy.white@wilkinskennedy.com www.wilkinskennedy.com


Fred always wanted to run his own business and he finally took the plunge in 2006. He hasn't looked back since, having established a successful self storage business together with a thriving removals business.


“From a start-up business during the financial crisis, through to now when we’re looking to expand and grow even further, B P Collins has been a crucial part of the journey and we’re glad to have them on board.”


Frederic de Ryckman de Betz Managing Director, Attic Self Storage


As a new business, Fred was keen to partner with a trusted law firm that could support and advise the Company as it grew. “We saw the value of developing a long-term relationship with a partner that could offer us ongoing advice and support as required and that’s exactly what we’ve got with B P Collins eight years on. The main benefits of the service are their professionalism – they will always get back to me quickly. Furthermore, their experience across a huge range of issues is invaluable."


Throughout the company’s growth, B P Collins has remained a trusted and valued partner of Attic Self Storage.


talk to your local legal experts 01753 889995 | bpcollins.co.uk


THE BUSINESS MAGAZINE – THAMES VALLEY – MARCH 2015 www.businessmag.co.uk


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36