Solicitors Regulation Authority (SRA): SRA Accounts Rules requires all solicitors with client money accounts to submit an annual accountants report.
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The Solicitors Regulation Authority (SRA) regulates solicitors in England and Wales. SRA Accounts Rules requires all solicitors with client money accounts to submit an annual accountants report. Goringe Auditors Limited specialises in delivering these reports.
The audits are in the public interest; solicitors might hold client money for a number of reasons (e.g. probate, conveyancing or to fund court cases), so it’s critical that there are regular and stringent checks in place to ensure these funds aren’t misappropriated.
Any solicitor with client money accounts has to engage an auditor to submit an accountants report to the SRA within 6 months of its year end.
Jacqui Waring Director of Goringe Auditors Ltd. comments:
Essentially we carry out sample checks on transactions to ensure everything is as it should be. We select a sample of payments and receipts for a client money account and we check where it’s gone or come from — and why. It could be a reimbursement for the solicitor’s office account (for instance if they’ve had to pay a witness or pay for a land search), but I have to follow the trail to confirm it’s legitimate and within the SRA Accounts Rules.
The SRA is looking for repeated breaches of its rules. Any sniff of dishonesty may get a solicitor struck off. So we’re combing through transactions to ensure there’s nothing untoward going on.
The SRA Accounts Rules specify a list of procedures to be performed (including sampling payments and receipts, and checking the bank reconciles with the accounting system on different dates). From here if there are any discrepancies, Jacqui will dig deeper to identify the nature and cause of any breaches.
Jacqui is also expected to establish when remedial action might have taken place, i.e. if there was a breach, was it rectified quickly? If it wasn’t, she must report this fact to the SRA in her accountants report and recommend improvements in the company’s processes and procedures to prevent such slip ups happening again.
The detailed audit acts as a hefty deterrent to fraudulent behaviour. Obviously if fraud were found to be taking place, that would mean criminal proceedings, but it’s simply our job to carry out the sample checks.
I visit my client’s premises where I take a sample of transactions and request supporting evidence in the form of cheques, invoices and any related documents — I follow the paper trail and make sure everything is where it’s supposed to be.