The SRA have engaged in a consultation whereby they are proposing to abolish the annual Accountants Report. Whilst there is a cost to both the firm and to the SRA in producing and processing these reports, many firms use this as an annual “health check” on their COFA Compliance Plan. There has always been a question as to the validity of this approach as the report is very prescriptive over what is examined and the data is by definition between 6 and 18 months out of date anyway.
Under the new proposals, at the annual PC renewal stage, the COFA will be required to sign a declaration that they are satisfied that the firm is managing its client account in accordance with the SRA Accounts Rules.
In the discussion paper, the SRA make the point that the COFA’s duties relate to compliance by the law firm, its managers, and its employees with the SRA Accounts Rules. COFAs will be unable to effectively fulfil their duties without access to financial management information, and in order to ensure compliance with Rule 1.2 of the SRA Accounts Rules, COFAs will need to consider whether they are able to access information on the practice’s overall financial status and be in a position to make an assessment of that status.
If you are a COFA, a partner or a manager, you will probably want some form of independent review of your processes. Financial Eye offer a complete review and report on your COFA Compliance Plan. We detail for you those areas where your processes and controls need to be brought in to line. This can be followed up with our help in prioritising, detailing and setting up those changes. If you do not have a COFA Compliance Plan incorporating a COFA Risk Index and toolkit, Financial Eye can prepare one for you. We then find that most of our clients take our annual support package because having got themselves on-course, they want to keep up with the changes.
If you are concerned about COFA compliance, then please get in contact with Financial Eye for a confidential discussion. The SRA are closing the discussion in mid-June.
Director at Financial Eye