x
RECEIVE BUSINESS TIMES FREE TO YOUR DOOR EACH MONTH, COURTESY OF ROYAL MAIL.
* indicates required

Solicitors face tighter regulations

EARLIER this month a Consultation Document appeared on the SRA (Solicitors Regulation Authority) website.

The consultation concerns the future of The Reporting Accountants’ Annual Report on compliance with The SRA Accounts Rules and it is possible that the effects could be fairly immediate.

The basic proposals, which are planned for implementation in October 2014 (subject, of course, to the outcome of the consultation) are that;

* The mandatory requirement that law firms have their client account reviewed annually by an independent accountant and a report issued to the SRA is removed

EARLIER this month a Consultation Document appeared on the SRA (Solicitors Regulation Authority) website.

The consultation concerns the future of The Reporting Accountants’ Annual Report on compliance with The SRA Accounts Rules and it is possible that the effects could be fairly immediate.

The basic proposals, which are planned for implementation in October 2014 (subject, of course, to the outcome of the consultation) are that;

* The mandatory requirement that law firms have their client account reviewed annually by an independent accountant and a report issued to the SRA is removed completely.

* That the role of the law firms’ Compliance Officer for Finance and Administration (COFA) is clarified and will include a requirement that they complete an annual declaration that their firm comply with the rules. This will be done annually with the

Practicing Certificate Renewals.

The role of the COFA in law firms can prove to be an onerous burden on those holding the position. The proposals add to the existing burden and as a result additional risks of non-compliance may arise.

This consultation is also the first stage of a general review of the SRA Accounts Rules in the coming months to ensure they are ‘fit for regulatory purpose’.

On balance, while the current reporting regime is far from ideal as it is a fairly historical exercise, I am not sure that the current proposals will achieve what is desired. Good firms with sound governance will, I believe, still continue to be compliant and take change in their stride but smaller firms with stretched resources and financially inexperienced staff and partners may fall behind.

There is now however, an opportunity for firms to consider their own specific risk exposure rather than purely complying with a one size fits all approach.

If you would like to discuss the impact of the Consultation Document in more detail, contact Richard Burkimsher at Hawsons Chartered Accountants on 01604 645600 or e mail

Companies mentioned in this article

More financial articles: