In Practice News
The current regulations have been in force since 2014, so this change is considered necessary and long overdue and follows several years of careful review and consideration.
The Society will continue to provide guidance on how to navigate the regulations in advance of them coming into force on 1 July 2023.
Key updates
New protections for client moneys have been added. In addition, the various provisions of the existing regulations which were considered inadequate or not sufficiently clear have been amended.
Key updates to the reporting accountant’s role include;
- Reporting accountant’s reports are to be filed within five months of the accounting date.
- Reporting accountant to test check postings before and after accounting date.
- Reporting accountants to test check that withdrawals of fees are notified to the clients.
- Reporting accountants may report, directly to the Law Society, an opinion or a suspicion of a deficit, rather than waiting to submit annual report.
- Closing reporting accountant’s reports are to be filed within three months of cessation.
- Reasons are to be provided for withdrawal of approval of a Reporting accountant.
Each year the PSRA encounters ongoing issues with incomplete Accountant’s Reports, which impacts on the efficiency of the renewal process (both for your client and the PSRA), requiring additional engagement with the licensee or their representative in order to address the non-compliance matters contained in the Accountant’s Report.
By way of highlighting ongoing issues with incomplete Accountant’s Reports (PSRA/S35 Renewal ABC), the PSRA has complied the following guidance in relation to common issues encountered:
- Section 1.2 of the PSRA Accountant’s Report requires that all addresses at which the business is carried out are entered. – Frequently these details are omitted.
- The Accountant’s signature is required to be inserted at various points throughout the Accountant’s Report, namely Section 4.2 and Appendices 1, 2, 3A , 3B, 4 and 5. In some cases the signature is not inserted or is not correctly signed. A physical signature or a verified digital signature – for example DocuSign is acceptable.
- Appendix 1 and Appendix 2 of the Accountant’s Report – where no matters for concern have been identified by the Accountant a ‘Nil’ response is required to be inserted in the appropriate sections of the Report.
- Appendix 3A (Client Account Balancing Statement) requires all rows to be completed fully and correctly. Each row requires a figure to be inserted or, where there is no applicable figure, ‘Nil’ is inserted in the response box.
- While the Client Account Balancing Statement is prepared by the Licensee, however the accountant should ensure that all figures in the balancing statement are inserted correctly to arrive at the final balancing figure indicating whether there is a surplus/deficit (Row K) on the client account. Where the Report indicates that the client account balances, a ‘Nil’ response should be inserted in (Row K) indicating neither a surplus nor a deficit on the client account.
- Appendix 4 – “Name on Account”. The full title of the client account should be included confirming the word ‘Client’ is in the title.
By adhering to the above points when preparing your Accountant’s Report for inclusion with your Licence Renewal Application, this will ensure that your renewal application is processed in a timely manner, without the requirement to submit an amended Accountant’s Report to the Authority.