The Solicitors Regulation Authority have launched a second consultation dealing with accountants’ reports.

Following the first consultation, firm requirements were  changed to provide that a report only needed to be delivered to the SRA  if it was qualified and that no report at all would be required from firms that receive 100 per cent of their fees from Legal Aid work.

This next phase consultation looks at:

• redefining the circumstances in which accountants’ reports are qualified,
• amendments to the format of the reports, and
• which firms pose a low risk to clients’ funds and could be excluded.

Annette Lovell, Director of Regulatory Policy, said:

“The underlying purpose of obtaining accountant’s reports is to ensure client monies are properly protected. We are proposing that the rules are changed to give greater importance to the professional judgement of the reporting accountant in identifying significant risks to the proper handling of clients’ funds. This was something raised in our first consultation and we revisit this issue in the new consultation.

“We also look at the redesign form which should make it easier for accountants to decide what checks and tests they need to confirm, both to us and the firms concerned, that client monies are safe.

“We are also seeking views about whether some firms – only those presenting a low risk to client monies – should be required to obtain a report at all. We welcome views from all those who will be affected by these proposals.”

The consultation, entitled Proportionate regulation: reporting accountant requirements and which closes on 28 January 2015, can be found on the SRA web site at www.sra.org.uk/sra/consultations/reporting-accountant-requirements.page