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Update on New SRA Accounts Rules

At a recent Solicitors Conference hosted by the ICAEW, which included presentations by the SRA (“Solicitors Regulation Authority”), the following were highlighted:

  • A solicitors’ practice currently complying with the SRA Accounts Rules 2011 will be able to comply with the revised Accounts Rules with minimal adjustment (although it will be necessary to make adjustments to reflect where the new Accounts Rules will lead to a change to firms’ procedures);
  • The SRA are not planning to issue guidance relating to the new Accounts Rules imminently, and may not do so until shortly before the effective date of the new Accounts Rules on 25 November 2019 ~ the reason for this is because compliant firms will require minimal adjustment as noted above;
  • However, as the key in the future will be the firm’s procedures, it is recommended that there is liaison between solicitors and their accountant before 25 November 2019 to ensure that there is not an “automatic qualification” in respect of the new Accounts Rules as a result of the Reporting Accountant not being satisfied with the systems and controls in place. Note that any firm without detailed procedures, “because we rely on the detail in the Accounts Rules”, intending to continue applying the SRA Accounts Rules 2011 will likely have breaches as a result of differences between these and the new Accounts Rules;
  • The Accountant’s Report will cover compliance with the SRA Accounts Rules 2011 until 24 November 2019, and then the new Accounts Rules for the remainder of the accounting period. Therefore, until the end of 2020, the HAT SRA Accounts Rules Manual will be a hybrid covering both the current and the new Rules ~ given the extended focus on systems and controls the updated Manual will include the requirement for a pre-planning meeting as well as a pre-planning letter; and
  • Whistleblowing obligations (where there are risks to the integrity of handling client money) should not be forgotten.