Do you require an SRA Audit?
Most solicitor firms in England and Wales handling client money must obtain an accountant’s report within six months after the end of their accounting period. However, there are some exceptions to that rule:
• If all client funds are received from Legal Aid Agency
• Average of client fund balance is less than £10,000 and the client account did not exceed £250,000 at any time throughout the period.
If the above does not apply to you then you will need an SRA audit and Hillier Hopkins LLP are here to help. Please get in touch if you require any assistance.
What are the SRA Accounts Rules?
The SRA Accounts Rules set out the requirements that all regulated firms (including sole practitioners) need to abide by to ensure they are compliant with regulatory standards. The key principles and rules are:
1. Client Money: Client money is funds held by the firm relating to regulated services delivered to the client. This includes funds for fees if a bill has not been sent to the client.
2. Client Account: A dedicated client bank account must be used to always hold client funds separate from the firm’s business account.
3. Withdrawals from Client Account: Funds can only be withdrawn from the client account for the purpose for which it is being held and sufficient funds are held on behalf of the individual client.
4. Interest on Client Funds: Clients should receive a fair amount of interest on money held on their behalf. You should have a policy included in your terms and conditions relating to when interest will be paid to a client and how it will be calculated
5. Accounting Systems: Firms must maintain detailed and up-to-date ledger accounts of all client related transactions including a client side and business side of the ledger.
6. Bank Reconciliations: Firms must complete a 3-way bank reconciliation monthly to ensure the client bank account, cashbook balance and matter listings are fully reconciled with any discrepancies being investigated and rectified promptly.
7. Residual Balances: Firms must return funds back to the client promptly as soon as there is no longer a proper reason to hold those funds.
8. Accountants’ Reports: Firms must conduct an annual SRA audit and obtain an accountant’s report on the findings within six months of the accounting period. If material breaches are identified by the auditor then the report will be submitted to the SRA
Other services we provide
• Statutory accounts preparation
• Statutory audit
• Corporation tax returns
• Partnership tax returns
• Personal tax returns for LLP members or Directors/Shareholders
• VAT planning and compliance
• Management accounts
• Outsourced Finance