What solicitors should prepare for when handling SRA audits
01/11/2023
SRA audits are designed to ensure that solicitors are compliant with the regulations and standards set by the Solicitors Regulation Authority (SRA).
While the prospect of an audit can be daunting, proper preparation can make the process far less stressful and more constructive.
What are SRA audits?
SRA audits aim to assess a solicitor firm’s compliance with various regulations, including the SRA Handbook, the Code of Conduct, Anti-Money Laundering (AML) regulations, and the Data Protection Act, among others.
This involves undergoing an accountant’s report for the relevant accounting period.
Who needs SRA audits?
Essentially, if your firm handles client’s money and is based in England or Wales, you will need to undertake an audit in line with SRA regulations.
As outlined by the SRA, if you have done any of the following during an accounting period, an accountant’s report is required:
- Held or received client money
- Operated a joint account
- Operated a client’s account as a signatory
The audit serves multiple purposes:
- Ensuring solicitor firms are in line with the legal standards and regulations set by the SRA
- Protecting the interests of clients
- Maintaining the integrity of the legal profession
- Identify potential risks that need to be addressed
If a significant breach or significant weakness has been identified, it will need including on the accountant’s report and the report will be deemed qualified.
A qualified report must be sent the SRA within six months of the end of the accounting period. Failure to report breaches to the SRA when detected by the firm could result in disciplinary action, as could failure to send a qualified accountant’s report.
Failure to provide an accountant’s report or breaches of the rules could result in disciplinary action, so it is essential to prepare for your upcoming audit.
Steps to prepare for an SRA audit
Ensure your policies and procedures are up to date and documented
Ensure that the firm’s policies and procedures are up to date and documented sufficiently, in particular where the rules now reference ‘promptly’ that the firm’s definition of such is clear.
Prepare and deliver pre fieldwork information
As part of planning the SRA engagement, our audit team will request a number of documents in advance of the fieldwork. Preparing and delivering these per the timeline set out will aid the fieldwork progress greatly.
Our team will also have a number of initial queries to go through, as well as discussion of systems and controls. Allocating some time ahead of the fieldwork to discuss these will set the engagement up for a successful process.
Organise your documentation
A successful audit will require thorough documentation. Ensure that all records, including client files, financial transactions, compliance checklists, and training records, are well-organised and easily accessible.
Train your team
Your staff should be adequately trained to understand the importance of the audit and what is expected of them. This includes being familiar with the SRA regulations and how they apply to their specific roles.
Prepare a response strategy
Even with thorough preparation, audits may uncover areas of non-compliance.
With the guidance of our experts, you can put a strategy in place to respond to any issues as quickly and efficiently as possible.
These audits are essential to uphold the integrity of the legal profession, so approach them with the outlook of ensuring your client’s satisfaction and trust are upheld.
At WMT, our statutory audit team will assist your firm with a seamless SRA audit. If you’d like more information about how can help, please contact us today.
