Financial management—regulatory requirements 2011 [Archived]
Produced in partnership with DG Legal
Financial management—regulatory requirements 2011 [Archived]

The following Practice Compliance practice note produced in partnership with DG Legal provides comprehensive and up to date legal information covering:

  • Financial management—regulatory requirements 2011 [Archived]
  • What is meant by financial risk?
  • SRA Handbook
  • Lexcel
  • Monitoring financial stability
  • Other financial management tools
  • Reporting to the SRA
  • Remedying issues
  • Who should be responsible for financial management?
  • Financial management policy
  • More...

Financial management—regulatory requirements 2011 [Archived]

This practice note covers the regulatory requirements that must be observed to minimise any events that could affect your firm’s financial stability. This is sometimes referred to as managing financial risk. It also addresses additional financial management requirements that apply to Lexcel accredited firms.

What is meant by financial risk?

Every business owner will want to ensure their business is run on a sound financial footing. Taking steps to promote the continued financial stability of the firm is key.

Other than what is covered in this practice note, the SRA is not prescriptive when suggesting what tools firms should use to ensure financial stability.

The amount of resource expended on managing financial risk will vary from firm to firm and will depend upon many factors such as the size of the firm and the degree to which it is presently financially stable. For instance, a firm that is heavily dependent on bank borrowings will wish to invest significant resources to implement financial risk systems that are monitored at regular intervals, eg weekly or monthly. Other firms may be content to spend less time on financial risk systems on the basis of, for example, relative financial stability or the relatively small size of the firm. These firms may also review systems less regularly, for instance quarterly or six monthly.

SRA Handbook

The SRA Handbook commences with ten

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