Solicitors’ accounts audits – making things more ‘outcome-focused’
You have to love our governing bodies use of language. The phrase ‘outcomes-focused’ is one that would send most people scurrying to Google to try and find a definition. But for those in the financial sector who act as a reporting accountant for solicitor clients operating client accounts, it’s much more important to understand exactly what this phrase means, and how recent changes to the SARs could affect how we do our jobs.
The key aim of making the SARs more ‘outcomes-focused’ was to clarify the role of accountants who act on behalf of solicitors. None of the changes should really have come as a surprise to anyone in the industry, as we all knew that the time was right for a more 21st Century approach to what is a highly complex field.
But not only has it had an impact on the way accountants do their jobs, but also on the legal sector too – a sector that has been buffeted by a veritable Tsunami of changes in recent years.
SARs changes and ‘outcomes-focused’ principles means that everyone has to pay particular attention to best practice routines. The onus is now on us to prove that we are being both thorough and precise in a huge range of activities, from governance structures through to compliance with specifically defined systems and controls.
Outcomes-focused – a ‘non-phrase’ or something with real clout?
So what exactly does ‘outcomes-focused’ actually mean? Well, it’s focusing on the principles and outcomes that govern the provision of accountancy and auditing services to a very demanding and highbrow profession. We’re not saying it’s a case of ‘one rule for the solicitors and another for the rest of society’, but what the updated SARs do take into account (which perhaps they failed to do so before) is the complexity of the legal profession in comparison to other sectors. An outcomes-focused approach has been defined by the SRA as one that:
- Puts the client first, as long as it doesn’t prejudice the public interest
- Achieves the right outcome for a client
- Is flexible
- Moves away from the prescriptive rules if at all possible.
The devil’s in the details…
What it isn’t is a box-ticking exercise or a ‘one-size-fits-all’ approach to the problem. It’s also worth remembering from the outset that the new SARs are applicable to the accountant carrying out an audit, and not the legal sector. The rules also apply to those who work as an accountant within the confines of a legal firm.
With 53 rules and regulations now in place, its crucial that any accountancy firm operating on behalf of legal clients and carrying out audits should be familiar with the application of all of them. There is the potential for unintentional breaches of the rules, so attention to detail is crucial from hereon in. Which is lucky for those working in accountancy, because if there’s one group of professionals that truly understands that the devil’s in the details, it’s accountants.