SRA Guide

SRA Guide

SRA Guide

1st September 2022 | Audit

Our team of professionals at ARK Accountants is skilled in providing high-quality audit, accounting, tax, and consulting services to a range of sectors and professions.

However, we decided to concentrate on one service in particular in this guide: SRA Accountants Report also known as SRA Audit.

Everything you may possibly need to know about SRA Accountants Report audits will be covered in this blog. What they are, why they are crucial, and how our staff can support you during this procedure.

Who Should Have An SRA Accountants Report?

English and Welsh-based law firms or solicitors that handle client funds as part of their work are required obtain an SRA Accountants report every year. If the accountants report is qualified to show a failure to comply with these rules, the report must be delivered to the SRA within 6 months of the end of the accounting period.

If all of the client money held or received during an accounting period is money from the Legal Aid Agency, or if the statement or passbook balance of client money law firm have held or received during the accounting period does not exceed: an average of £10,000; a maximum of £250,000, or the equivalent in foreign currency, then the firm can claim exemption from the requirement to obtain an accountants report.

What Is An SRA Accountants Report?

Under SRA rule 12, law firms must ensure that they obtain SRA Accountants Report (AR1), prepared and signed by an accountant who is a member of one of the chartered accountancy bodies and who is, or works for, a registered auditor.

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• Money is only withdrawn from the client account for the purpose for which it is being held, with appropriate authorisation and to the extent that there are sufficient funds held on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 firm must get the accountants report within six months of the period's end (which typically matches with the statutory accounting period for the financial statements).

The Report only needs to be delivered to the SRA if the Accountants Report (AR1) 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.

If minor "technical breaches" of the rules are quickly fixed after discovery and client money isn't considered to be at risk, they do not need to be reported to the SRA.

What Is The SRA Audit Process?

We work with you to obtain access to the firm's records, choose our audit samples, and provide a list of the information needed for our work in advance in order to make the audit process as stress-free and seamless as possible. We will go over the necessary information with management and the appropriate staff to make sure there are no obstacles to getting it, and we will then lay out a timeline for its receipt, review, and any on-site work that needs to be done at each office.

In order to complete our reviews, we will need access to bank statements, client ledgers, cashbooks, and client files etc. We will work in collaboration with your staff to complete the work as quickly as possible and without interfering with the firm's regular business operations.

To avoid unpleasant surprises and to make sure we fully comprehend the business and the transactions, we will identify and discuss any potential issues with you as they emerge throughout the audit process.

After the process is complete, we will schedule a meeting with management to fully report on the audit work's findings, and we will provide a comprehensive report.

If there are no problems identified, an SRA audit can be finished fairly quickly; otherwise, it may take longer. One of the reasons you require an accounting firm like ARK Accountants is that you don't want to spend a lot of time on a stressful audit. Our knowledgeable team can assist in keeping you informed throughout the audit process and will collaborate with management and staff to ensure that any issues are addressed where they are found.

How ARK Accountants Will Make Your SRA Audit Easier And Add Value

We are in the best position to assist your company with completing this process because we are aware of the pressures related to SRA audits and audits in general. Our SRA audit service will be bespoke and tailored to your business thanks to our client-focused approach. The collaboration process prior to your SRA audit is greatly facilitated by our use of the most recent cloud-based audit systems. By choosing samples and gathering data beforehand, we can potentially cut down on the amount of time we spend on-site, minimising the disruption to your staff.

In addition to going above and beyond the minimal reporting requirements, our skilled staff will thoroughly examine a firm's systems and controls as part of the audit process and offer helpful recommendations for improving those systems in addition to informing the firm internally about any isolated technical breaches that, while not reportable to the SRA, the firm may want to investigate further to identify weaknesses in their procedures. We will delve deep into your company to comprehend your accounting records, accounting processes, and best practises advice. Our team will be pleased to collaborate with you in developing the necessary systems to guarantee that client accounts are secure and adhere to the Accounts Rules.

We want to give management complete peace of mind that their client money processes and controls are strong, that they are adhering to all legal and regulatory requirements.

What makes ARK Accountants a good choice to provide SRA Accountants Report?

At ARK Accountants, we believe in providing our clients with transparent and predictable pricing for all our services. That's why we are excited to announce that we are now offering a fixed fee structure for our SRA Accountants report service, starting from just £125 per month*. This means that you will know exactly how much you will be paying for our SRA Accountants report services right from the start, with no hidden fees or surprises. We understand that legal compliance can be a complex and time-consuming process, and our goal is to make it as simple and stress-free as possible for our clients.

Our SRA Accountants report services cover a range of areas, including financial statements, client account rules compliance, and more. With our team of experienced and knowledgeable accountants, you can rest assured that your report will be accurate, comprehensive, and tailored to your specific needs.

To learn more about our fixed fee structure for SRA Accountants report, or to discuss your specific needs with one of our team members, please don't hesitate to get in touch with us. We are always here to help you navigate the complexities of legal compliance and financial reporting, and we look forward to working with you soon.

Get In Touch With ARK Accountants About Our SRA Accountants Report (SRA Audit Service)

To prepare for an upcoming SRA audit, law firms and solicitors can get in touch with the team at ARK Accountants. We would be happy to assist you and your company in passing your SRA audit, allowing you to concentrate on the important things while having peace of mind that your client accounts are secure and that you have sound procedures in place.

Disclaimer: This blog post is intended for informational purposes only and should not be considered as professional tax or financial advice. Consult with a qualified accountant or tax professional for personalized guidance regarding your specific circumstances.

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