Assessing the risks
SRA Accounts Rules changes mean greater focus on risk assessment and judgement, says Louise Sharp.
Accounting firms with law firm clients will be thinking about how the recent changes to the accountant’s report requirements by the Solicitors Regulation Authority (SRA) affect the work they perform under the SRA Accounts Rules. This may mean bigger changes for some than for others, depending on the nature of their clients and the work previously performed.
We have set out some markers to help members get to grips with these changes. These were covered in the recent faculty webinar, SRA Accounts Rules and the role of the reporting accountant, by Janet Taylor, a specialist on SRA Accounts Rules at Taylor Mowbray and a member of the ICAEW Solicitors Special Interest Group. Detailed interim guidance has also been published in ICAEW Technical Release TECH 16/15AAF.
Since 1 November 2014, law firms have only been required to submit qualified accountant’s reports. Prior to this all accountant's reports were filed with the SRA.
For law firms with financial year-ends ending on or after 1 November 2015, the SRA has introduced two key changes:
- Additional exemptions from the requirement to have an accountant’s report for low risk law firms. However, all law firms need a final report if they cease to hold client money – even for moving from a sole trader to a partnership; and
- SRA Accounts Rule 39 has been replaced with Rule 43A.1 and a new accountant's report form ARI.
This is an extract from an article in the May 2016 edition of Audit & Beyond, the magazine of the Audit and Assurance Faculty.
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