SRA refines 'accountants report' exemption plans

PLANS to streamline the elements needed to complete annual accountants’ report for law firms have been revealed by the Solicitors Regulation Authority (SRA).

Its newly simplified approach has been put forward as a more amenable alternative to its previous plans – announced in May – to do away with the reports completely, a move which met with resistance from both solicitors and accountants. The accountants’ report is an audit of solcitiors’ client account – where they hold client’s money.

Now, while firms will still have to commission accountants’ reports within six months of their financial reporting period, only those reports that are qualified will have to be filed with the SRA.

It also means that firms whose fees are entirely derived from Legal Aid work will be exempt from commissioning a report.

The changes will be phased in in two stages, beginning in October this year, while phase two, which includes issuing a fully revised format for the accountant’s report, will kick in from April 2015.

The body has also ensured that the Overseas Accounts Rules have been simplified to make it significantly easier for firms with foreign practices to comply with the SRA’s stipulations.

All the latest changes will still need to be approved by the Legal Services Board before inclusion in the SRA’s Handbook.