How to Prepare for the Solicitors Regulation Authority Audit

by - Tuesday, November 20, 2018


Solicitors are required to annually report to the Solicitors Regulation Authority (SRA) regarding any money passed through their clients’ account, which should adhere to the many rules set in the SRA handbook. Unfortunately, the extensive account rules can lead to various logistical issues for firms who aim to be 100% compliant. It’s, therefore, no surprise that many solicitor firms are afraid they’ll experience a technical breach. If this sounds like you, below you will find out how to effectively prepare for the Solicitors Regulation Authority audit. 

Keep on Top of Client Account Reconciliations 
It is the responsibility of a compliance officer for finance and administration (COFA) to both check and sign all client account reconciliations. According to the SRA Account Rules 2011, the signed document must be a three-way reconciliation of three figures: the cash ledger balance, the bank account balance, and the cumulative balances on the cash ledgers. The SRA will always request to review the last six months’ client account reconciliations during an investigation. If a COFA has failed to sign them, this will flag to the SRA that the officer has been unable to check them regularly, and your firm is failing to manage the systems in place. 

Host Regular Reviews with the Accounts Department 
A COFA would also be wise to host either annual or six-monthly one-to-one reviews with every member of staff within the accounts department, including any junior members. The review will provide staff with an opportunity to discuss any bookkeeping concerns or to put forward any recommendations to improve systems or processes. Doing so will prove to the SRA you are willing to go the extra mile to improve and protect your systems. 

Turn to Experienced SRA Audit Solicitors 
If you have little experience regarding a Solicitors Regulation Authority Audit, you would be wise to turn to the experts. For example, Crawfords’ experienced Manchester accountants can ensure every financial statement and other mandatory documentation are compliant with the SRA and can work alongside your COFA or COLP to introduce necessary changes. 

Monitor SRA Guidance and Warning Notes 
The COFA must also continually monitor the SRA’s guidance and warning notes, which they often publish periodically regarding areas for concern that could increase the risk of a breach. As a result, he or she may need to introduce various systems or employee training to adhere to the SRA’s concerns. 

Ask an Auditor Questions 
The audit day will undoubtedly be a nail-biting time for your firm, even if you know you have followed the account rules to the letter. It’s always beneficial to ask the audit manager who visits the firm during an audit if there are any systems or procedures that could be either changed or improved. If possible, try to ask the question during a meeting to discuss the audit’s outcome, as he or she may record their voice stating no changes are necessary, which is ideal if the SRA later alleges the firm has inadequate systems or processes in place.

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