COFAs asked to vouch for management of client accounts

By George Bull (interviewed by Sarah Perry)

Proposals to remove a mandatory requirement for firms to submit an annual accountant’s report to the SRA, and to require Compliance Officers for Finance and Administration (COFAs) to sign a declaration of satisfaction with the firm’s client account management, are the focus of an SRA consultation. The proposals are part of a programme of reforming the SRA’s regulatory regime to reduce unnecessary burdens and provide flexibility to deliver good financial management.

Why is the SRA consulting on the removal of mandatory requirement that firms must submit an annual accountants report to the SRA?

The reasons for this are set out in the consultation document itself. This should be seen in the context of the SRA confirming or modifying aspects of its regulatory approach as it comes to grip with its role as regulator. The SRA Handbook has recently been updated as part of the process of continuous monitoring and updating.

A review of the reporting accountant’s role in respect of client money was recognised as an important task in the early days of the SRA. However, at the time it was felt that the existing rules worked sufficiently well – as a result, the SRA was able to prioritise its resources to deal with other major tasks which it faced as a new regulator. As it is asserting its presence as regulator, and becoming familiar with the issues of the legal sector, it is now able to turn its attention to topics such as the SRA Accounts Rules.

What’s the reasoning behind the plan to require COFAs to sign a declaration they are satisfied that the firm is managing client accounts in accordance with the SRA Accounts Rules?

If the role of the reporting accountant is diminished or eliminated, COFAs will face far greater personal responsibility. While in-house and external support can