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Who can prepare solicitors accounts?

I know that only a Registered Auditor may complete the annual Accountant's Report for the Law Society.

Am I correct in saying, however, that there are no restictions as to whom may prepare the annual accounts and SA Tax Return?
Simon Paskin

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04th Aug 2005 08:32

Soliciitors Accounts
There appears to be a lot of information flying around here so:-

To carry out the day to day accounting function then a knowledge (and application) of the Solicitors Accounts Rules is essential (although not required by any statute).

However, failure to comply with the Solicitors Accounts Rules will lead the solicitor to the Solictors Disciplinary Tribunal. A non solicitor employee can also be warned off being employed by any legal firm apart from any other sanctions.

Use this guide - you do not have to be an electrician to change a plug but you do need an electrician to re-wire your house!

To carry out the statutory function of providing a certificate known as the Accountants Report to certify that the practice complies with the Solicitors Accounts Rules you need to be a registered auditor.

To prepare the annual accounts and submit to Inland Revenue you do not need anything other than to know what you are doing, but even then that does not always appear to be the case.

BUT any solicitor would be foolish not to employ a bookkeeper with at least membership of the Institute of Legal Cashiers and Administrators for their day to day work or (in the larger practice) to be working towards that qualification under the quidance of someone already with that qualification.

My view is - if you don't know what you are doing don't touch (don't even try to change the plug!) and stick to what you do know.

Many sole practitoners attempt to carry out the bookkeeping themselves, some succeed many more fail which is why I have successfully been a freelance since 1999.

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By Anonymous
28th Jul 2005 20:06

Yes
Only a registered auditor may prepare the report under the solicitors' account rules, but there are no special restrictions on who may prepare the accounts/tax returns.

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03rd Aug 2005 12:06

Could someone please explain . . .

Could someone please explain why they consider it necessary that a firm engaged to prepare the accounts and tax returns of a solicitor (but not the Law Society report) have a good knowledge of the Solicitors' Accounts Rules?

Would it not be possible to either (i) totally ignore client account balances and transactions (and client account bank balances) when preparing the accounts, or (ii) simply ascertain the total client account balances and corresponding client account bank balances at the year end date (which should of course be the same figures) and include these in both current assets (bank accounts) and current liabilities (client ledger balances) in the solicitor's Balance Sheet?

I would prefer option (i) because the client account figures are not (in my view, at least) assets or liabilities of the solicitor.

David

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01st Aug 2005 18:37

Solicitors Accounts
Bob is 100% correct, there is nothing to prevent an unqualified person preparing the practice accounts and tax returns.

There is no corelation between this and the Solicitors Accounts Rules, however in my (27 years) experience within the profession it is normal practice for the person (firm) doing the SAR audit to prepare the practice acounts and deal with tax affairs.

This is for convenience and cost reasons primarily.

Geoff Smith
wwww.gcsps.co.uk

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