Your Guide To SRA Audits

1st October 2020 | Audit

At Williamson & Croft, our team of experts are well-versed in delivering high-quality auditaccountingtax and advisory services to a wide variety of industries and professions.

In today’s guide, however, we thought we’d focus on one service in particular – SRA Client Money Audits.

This blog will cover everything you could ever need to know about SRA audits. What they are, why they’re important and how our team can help you through this process.

Who Needs An SRA Audit?

Any Solicitors or law firms that are based in England and Wales and hold client money as part of their service are required to undergo an SRA client money audit.

What Is An SRA Client Money Audit?

The Solicitors Accounts Rules are laid out by the Solicitors Regulation Authority (SRA) within their standards and regulations which were last updated effective 25th November 2019. Included within these rules are requirements for obtaining and delivering accountant’s reports which cover the need for an annual audit of the firm’s client money.

These rules require that an accountant who is a member of one of the chartered accountancy bodies and who is, or works for, a registered auditor, reports to the firm on their compliance with the Accounts Rules. The Report is provided to a representative of the firm in a format prescribed by the SRA.

Specifically, the accountant is required to report on the following:

  • That there are appropriate systems, controls and records in place within the firm and that these are reconciled regularly.
  • That client monies received are paid promptly into a separate client money bank account.
  • Money is only withdrawn from the client account for the purpose for which it is being held, with appropriate authorisation and to the extent that there are sufficient funds held on behalf of a specific client.
  • Client money is returned promptly to the client as soon as there is no longer any proper reason to hold those funds.
  • Any breaches of the rules are corrected by the firm promptly upon discovery.

Does The Report Get Submitted To The SRA?

The Accountants’ Report must be obtained by the firm within 6 months of the end of the period to which it relates (usually co-terminus with the statutory accounting period for the financial statements).

The Report only needs to be delivered to the SRA if the Accountant’s Report is qualified to show a failure to comply with the rules, such that money belonging to clients or third parties is, or has been, or is likely to be placed, at risk.

Minor “technical breaches” of the rules (such as one-off due to human error) need not be included in any report to the SRA if they are corrected promptly on discovery and client money is not considered to be at risk.

What Is The SRA Audit Process?

We seek to make the audit process as stress-free and smooth as possible and so we will work with you to obtain access to the records of the firm and select our audit samples and provide a list of information required for our work in advance. We will discuss the required information with management and the relevant staff to ensure that there are no issues in obtaining this and then lay out a timeframe for receipt of information, review thereof and any onsite work required at each office.

We will need access to bank statements, client ledgers, cashbooks and client files to complete our reviews and aim to work in partnership with your staff to ensure that work is completed as efficiently as possible and does not disrupt the day-to-day operations of the firm.

We will highlight and discuss any potential issues with you as they arise throughout the audit process so that there are no nasty surprises in store and to ensure that we understand the business and the transactions fully.

We will arrange a meeting with management at the end of the process to report in full on the findings from the audit work and will provide a detailed written report in advance of the presentation.

An SRA audit can be completed relatively quickly if no issues are found or, if there are irregularities and problems, it can take longer. Spending significant time on a stressful audit is one of the reasons why you need an accounting firm like Williamson & Croft. Our experienced team can help keep you updated throughout the audit process and will work with management and staff to ensure that improvements are made where any issues are identified.

How Williamson & Croft Will Make Your SRA Audit Easier And Add Value

We understand the pressures associated with SRA audits and audits in general which is why we’re best placed to help your business complete this process. Our client-focused approach ensures our SRA audit service will be bespoke and tailored to your business. We use the latest cloud-based audit systems which makes collaboration before your SRA audit much easier. This ensures that we can potentially minimise the time we spend onsite by selecting samples and collating information in advance so that the disruption to your staff is reduced.

Beyond simply fulfilling the minimal reporting requirements, our experienced staff will also review a firm’s systems and controls in detail as part of the audit process and provide practical recommendations for the improvement of those systems as well as reporting internally to the firm on any isolated technical breaches which, whilst not being reportable to the SRA, the firm may want to investigate further to identify weaknesses in their procedures. We’ll get under the skin of your firm to understand your accounting records, accounting procedures and advise on best practice. Our team will also be happy to work with you to create appropriate systems that ensure client accounts are secure and compliant with the Accounts Rules.

We aim to provide complete comfort to management that they have robust client money processes and controls in place and that they are meeting their legal and regulatory requirements and can sleep sound knowing that their clients’ money is safe.

Get In Touch With Williamson & Croft About Our SRA Audit Service Today

If you’re a solicitors or law firm, want to prepare for an upcoming SRA audit and are based in Manchester, Liverpool, the surrounding areas of Wigan, Bolton, Stockport, Warrington or the wider North West then get in touch with the team here at Williamson & Croft online or by phone on 0161 399 0121. We’d be delighted to help you and your firm sail through your SRA audit, leaving you to focus on the things that matter, reassured that your client accounts are safe and have good processes in place.

We work with a number of sectors from the propertyconstruction and professional services industry right the way through to the digital & creativeretail & eCommerce and technology & software sectors. This breadth of experience makes us confident that we can help you too.

Williamson & Croft is a market leading accountancy, advisory and tax firm with particular specialisms in property, construction, retail, digital and creative, technology and professional services.

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