Accountants reports 2011—law firms [Archived]
Accountants reports 2011—law firms [Archived]

The following Practice Compliance practice note provides comprehensive and up to date legal information covering:

  • Accountants reports 2011—law firms [Archived]
  • Accounting period
  • Do you need an accountant's report?
  • Legal aid exemption
  • Small client account exemption
  • The exemption
  • Calculating whether the exemption applies
  • Time limits
  • Record keeping
  • Moving in and out of an exemption
  • More...

This Practice Note reflects requirements relating to law firm accountant’s reports in force from 1 November 2015. It relates to practice in England and Wales only, as there are separate rules relating to overseas practices. The purpose of the accountant report regime from 1 November 2015 is to facilitate effective supervision by the Solicitors Regulation Authority (SRA) of any risks to client money. This Practice Note reflects obligations under the SRA Accounts Rules 2011. For guidance on the 2019 regime, see Practice Note: Accountant’s report 2019—law firms.

The general rule is:

  1. all firms are required to obtain an accountant's report (unless an exemption applies) within six months of the end of the period to which the report relates

  2. only qualified reports have to be delivered to the SRA

The accountant's report is intended to facilitate SRA oversight of risks to client money. If the accountant considers that the Accounts Rules have not been complied with such that the safety of client money is at risk, they are required to qualify the report.

Accounting period

It is important to understand the concept of an accounting period, which governs time limits for obtaining and/or delivering the accountant's report.

Generally, the accounting period is the period for which your accounts are ordinarily made up, which must:

  1. begin at the end of the previous accounting period

  2. cover 12 months

There are limited exceptions, eg

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