The Solicitors Regulation Authority (SRA) Board recently announced its intention to relax the existing rigid requirements on the submission of accountants’ reports. The proposed changes are subject to approval by the Legal Services Board and if approved would be part of the version 15 of the SRA Handbook that goes live on 1 November 2015.
For accounting periods ending on or after 1 November 2015 accountants will be able to use their professional judgment in future to assess if the reports they prepare for solicitors’ practices comply with SRA account rules. Accountants will no longer need to qualify accounts for trivial breaches of the rules, but instead can focus on risks to client money. Revised accountants’ report forms will be available for use after 1 November 2015.
Guidance will be available on the SRA’s website well in advance of implementation. The exemption from the requirement for lower-risk firms to obtain an accountant’s report will be extended. Firms with an average client balance of less than £10,000 a year and a maximum account balance of £250,000 will be considered to be low risk and will no longer need a report.
Amending accountants’ reports is part of a wider regulatory reform project aimed at reducing the burden on firms without reducing the protection for consumers of legal services. The project has already seen the removal of the need for firms to deliver unqualified reports to the SRA and of the need for those firms that receive all of their fees from legal aid to obtain reports in the first place. Further work on the project will begin in the autumn and will look at simplifying the Accounts Rules themselves.
Further details are available from the SRA which can be found here
If you wish to discuss these changes further please do not hesitate to get in touch.