Solicitors

(updated December 2010)

Solicitors’ Accounts Rules 1998 

1.1       We are required, in compliance with section 34 of the Solicitors Act 1974 and Part F of the Solicitors' Accounts Rules 1998 to report to the Solicitors Regulation Authority whether, in our opinion, you have complied with Parts A, B, Rule 24(1) of Part C and Part D of the Solicitors' Accounts Rules 1998.

1.2       In order to meet these requirements, we will undertake whatever tests and examinations of your records we consider necessary. Part F of the Solicitors' Accounts Rules 1998 requires us to carry out certain specific tests, including:

(a)        obtaining details of all bank and building society accounts;

(b)        examining the client account bank reconciliations;

(c)        examining the bookkeeping system to ensure that it complies with Rules 32 and 33 of the Solicitors' Accounts Rules 1998;

(d)        reviewing transactions recorded in the bank statements, client cash book and client ledgers to ensure that postings are properly made;

(e)        vouching a selection of transactions to supporting documentation to ensure that receipts and payments are dealt with in accordance with the Solicitors' Accounts Rules 1998;

(f)         reviewing a limited sample of client and trust files;

(g)        reviewing office accounts for client money;

(h)        reviewing a sample of interest payments on separate designated client accounts;

(i)         confirming that records are being kept in respect of any appointments as liquidators, trustees in bankruptcy, Court of Protection receivers or trustees of occupational pension schemes; and

(j)         checking that passbooks and statements, or copies thereof, are being kept in respect of joint accounts and clients' own accounts, together, in the latter case, with cheque details where only copy statements are held.

1.3          As part of our tests, we will ask to see individual client and trust files. If access is denied on the grounds of confidentiality, we are obliged by the Rules to qualify our report to the Solicitors Regulation Authority, setting out the circumstances.

1.4          We will report in the standard form required by the Solicitors Regulation Authority. We will send a copy of the report to you. You are responsible for submitting the report to the Solicitors Regulation Authority within six months of the end of the accounting period to which the report relates.

1.5          We will comment in our report on any substantial departures from the procedures and guidelines issued by the Solicitors Regulation Authority for accounting for client money which we find during the course of our work. We do not undertake to discover any shortcomings in your systems or any irregularities on the part of your employees, beyond the work required under Part F of the Solicitors' Accounts Rules 1998. We will advise you of any such circumstances that we encounter during our work.

1.6          You are responsible for keeping the accounting records required by the Solicitors' Accounts Rules 1998 and for ensuring that all transactions in client money are in accordance with those Rules.

1.7          In accordance with rule 38 of the Solicitors' Accounts Rules 1998, we are instructed as follows:

(a)           You recognise that, if during the course of preparing an accountant's report;

(i)            we discover evidence of fraud or theft in relation to money:

•               held by a solicitor (or registered European lawyer, or registered foreign lawyer, or recognised body, or employee of a solicitor or registered European lawyer, or manager or employee of a recognised body) for a client or any other person (including money held on trust), or

•               held in an account of a client, or an account of another person, which is operated by a solicitor (or registered European lawyer, registered foreign lawyer, recognised body, employee of a solicitor or registered European lawyer, or manager or employee of a recognised body); or

(ii)           we obtain information which we have reasonable cause to believe is likely to be of material significance in determining whether a solicitor (or registered European lawyer, or registered foreign lawyer, or recognised body, or employee of a solicitor or registered European lawyer, or manager or employee of a recognised body) is a fit and proper person:

•               to hold money for clients or other persons (including money held on trust), or

•           to operate an account of a client or an account of another person, we must immediately give a report of the matter to the Solicitors Regulation Authority in accordance with section 34(9) of the Solicitors Act 1974;

(b)           we may, and are encouraged to, make that report without prior reference to you;

(c)           we are to report directly to the Solicitors Regulation Authority should our appointment be terminated following the issue of, or indication of intention to issue, a qualified accountant's report, or following the raising of concerns prior to the preparation of an accountant's report;

(d)           we are to deliver to you with our report the completed checklist required by rule 46 of the Solicitors' Accounts Rules 1998; to retain for at least three years from the date of signature a copy of the completed checklist; and to produce the copy to the Solicitors Regulation Authority on request;

(e)           we are to retain these terms of engagement for at least three years after the termination of the retainer and to produce them to the Solicitors Regulation Authority on request; and

(f)            following any direct report made to the Solicitors Regulation Authority under (a) or (c) above, to provide to the Solicitors Regulation Authority on request any further relevant information in our possession or in the possession of our firm.

1.8          To the extent necessary to enable us to comply with paragraph 1.7 above, you waive your right of confidentiality. This waiver extends to any report made, document produced or information disclosed to the Solicitors Regulation Authority in good faith pursuant to these instructions, even though it may subsequently transpire that we were mistaken in our belief that there was cause for concern.