Solicitors are responsible for protecting client money. ICAEW chartered accountants play an important role in reviewing how law firms do this through their reporting work under the Solicitors Regulation Authority (SRA) Accounts Rules. Solicitors often hold significant cash for clients, for example, house deposits or funds to purchase a business. It is crucial that this money is protected from misuse to protect clients, and for confidence in the legal profession. 

The SRA provides guidance on how reporting accountants should approach their work. It relies on reporting accountants using their professional judgement when planning, scoping and carrying out their work. To help reporting accountants, ICAEW’s Audit and Assurance Faculty has recently updated its technical release on the SRA Accounts Rules. 

TECH 01/21 AAF, which replaces TECH 03/20 AAF, provides support to reporting accountants undertaking these types of engagements. It explores aspects of these engagements, such as developing risk assessment procedures and providing example matters that might result in a qualification of an accountant’s report. Like previous versions, this update was developed with the support of the SRA. 

From a quality perspective, reporting accountants should ensure engagements are planned to be relevant to the law firm and type of work undertaken. For example, is the work proportionate to the law firm? How have risk assessments been documented prior to work commencing? Reporting accountants will also need to document the key judgements. For example, how were judgments reached and reviewed? How has the overall work programme been concluded on? Files should also document how the reporting accountant has communicated its conclusions to the law firm.

The SRA changed its reporting process for qualified reports in September 2020. These must now be submitted via their portal, mySRA, rather than via email. The SRA has reiterated that submitting qualified reports remains the responsibility of the law firm, not the reporting accountant.

While reporting accountants can continue to submit reports for law firms, the new system will not provide confirmation of the submission to the reporting accountant. System confirmations are only sent to the law firms. Reporting accountants who would like to document this in their files will need to ask the law firm for a copy of the confirmation. 

However, it is worth noting that evidence of the qualified report being sent to the SRA is not required for monitoring purposes. The key thing that QAD will review is evidence of clear communications between the reporting accountant and the law firm on the conclusions reached from their work, including evidence that the report has been sent to the law firm’s compliance officers for finance and administration.

ICAEW accountants wanting to know more about SRA Accounts Rules reports can access the ICAEW Audit and Assurance Faculty technical release here as well as find more resources and support from the ICAEW Solicitors Community. More resources for auditors and assurance practitioners are available from the ICAEW Audit and Assurance Faculty.