How Can a Solicitor Check If Their Accountant Is SRA-Approved

At Towerstone Accountants we provide specialist accountancy services for solicitors and law firms operating under SRA regulation. This article has been written to explain How can a solicitor check if their accountant is SRA-approved in clear practical terms so you understand how the rules apply in day to day practice. Our aim is to help you stay compliant protect client money and make informed financial decisions.

As a solicitor, choosing the right accountant is not just about tax efficiency or tidy year end accounts. It is about regulatory safety, professional credibility, and protecting your practising certificate. Over the years I have seen far too many solicitors assume their accountant understands SRA rules, only to discover later that key obligations were missed. The result is usually stress, remedial work, and sometimes uncomfortable conversations with the regulator.

In this article, I will explain clearly and practically how a solicitor can check whether their accountant is genuinely suitable from an SRA perspective. I will walk through what “SRA-approved” really means, how the SRA regulates accountants, what checks you should carry out, and what red flags I see most often in practice. By the end, you should feel confident about verifying your accountant’s status and protecting your firm.

Everything here is based on real UK regulatory practice, not theory.

Understanding what “SRA-approved” actually means

The first thing I always clarify with solicitors is this: the SRA does not operate a simple public list of “approved accountants” in the way people often expect.

There is no badge that says SRA-approved accountant.

Instead, the Solicitors Regulation Authority regulates solicitors and law firms, and it sets rules around who can prepare certain reports, handle client money oversight, and act in key compliance roles.

So when solicitors talk about an accountant being SRA-approved, they usually mean one or more of the following:

• The accountant is properly qualified and regulated by a recognised UK professional body

• The accountant is eligible to prepare SRA-required reports, such as accountants’ reports under the Accounts Rules

• The accountant understands and works in line with SRA Accounts Rules and compliance expectations

• The accountant is independent, competent, and acceptable to the SRA if reviewed

This distinction matters, because many capable general practice accountants are not suitable for solicitors, even though they are fully qualified.

Why this matters more than many solicitors realise

I have worked with solicitors for years, and one recurring theme is that accounting is often delegated without enough scrutiny. That is understandable. You are focused on clients, deadlines, court work, and billing.

But from an SRA perspective, your accountant is not just a service provider. They are part of your compliance ecosystem.

If your accountant gets it wrong, the SRA will not accept “my accountant told me so” as a defence.

The risks include:

• Breaches of the SRA Accounts Rules

• Incorrect handling or reporting of client money

• Late or incorrect accountants’ reports

• Poor systems that trigger SRA investigations

• Increased professional indemnity risk

In more serious cases, I have seen solicitors face conditions on their practising certificates, fines, and referrals to the SDT, all linked back to poor financial oversight.

That is why checking your accountant properly at the outset is essential.

The SRA Accounts Rules and the accountant’s role

To understand how to assess an accountant, you need a basic grasp of what the SRA expects.

The SRA Accounts Rules govern how solicitors handle money belonging to clients or third parties. These rules cover areas such as:

• Client accounts and office accounts

• Transfers between accounts

• Timing of withdrawals

• Residual balances

• Record keeping and reconciliations

• Reporting breaches

Your accountant often becomes involved in:

• Designing or reviewing bookkeeping systems

• Monthly and annual reconciliations

• Preparing year end accounts

• Advising on client money compliance

• Preparing accountants’ reports where required

If the accountant does not understand these rules deeply, problems follow quickly.

What makes an accountant acceptable to the SRA

Although the SRA does not approve accountants in advance, it does set expectations about who is suitable.

In practice, an accountant should meet all of the following criteria.

They are a member of a recognised UK professional body

This is non negotiable. The SRA expects accountants involved with solicitors to be properly regulated themselves.

Recognised bodies include:

• ACCA

• ICAEW

• ICAS

• CIMA

Membership matters because it ensures:

• Professional standards

• Ethical oversight

• Disciplinary processes

• Continuing professional development

If an accountant is unqualified, overseas qualified without UK recognition, or operating under a vague “financial consultant” label, that is a serious red flag.

How to check an accountant’s professional registration

This is one of the simplest checks, yet it is often skipped.

Ask your accountant:

• Which professional body are you a member of

• What is your membership number

Then independently verify it on the professional body’s website.

You are checking that:

• The membership is current

• The individual is not suspended

• There are no published disciplinary findings

If an accountant hesitates to provide this information, walk away.

Accountants’ reports and who can prepare them

Not all solicitors need an accountants’ report every year, but many still do, especially firms holding client money.

When an accountants’ report is required, the SRA expects it to be prepared by a reporting accountant who meets specific criteria.

The accountant must:

• Be a member of a recognised professional body

• Be independent from the firm

• Have appropriate experience

• Understand the SRA Accounts Rules

This is where many general practice accountants fall short. They may be excellent at tax returns or management accounts, but they have never prepared an SRA accountants’ report before.

You should always ask:

• Have you prepared SRA accountants’ reports before

• How many solicitor clients do you act for

• Are you familiar with the current SRA Accounts Rules

If the answer is vague, you are taking a risk.

Independence and conflicts of interest

The SRA places significant emphasis on independence.

An accountant cannot prepare an accountants’ report if they are too closely involved in the firm’s financial management in a way that compromises objectivity.

For example:

• Preparing daily client account postings

• Authorising transfers

• Acting as COFA

This does not mean your accountant cannot help with bookkeeping, but the boundaries must be clear.

A good accountant will proactively explain these boundaries to you. A poor one will not even realise they exist.

How to check whether your accountant understands SRA compliance

This is not about passing a technical exam. It is about practical awareness.

I suggest asking your accountant specific scenario based questions, such as:

• How do you handle residual client balances

• What is your process if a client money breach occurs

• How often should client account reconciliations be done

• When does a breach need to be reported to the SRA

You are not testing them for fun. You are checking whether their answers align with SRA guidance.

If you receive confident, clear explanations, that is a good sign. If you receive generic responses about “best practice” without reference to SRA rules, be cautious.

The difference between SRA experience and general legal sector experience

Some accountants market themselves as “legal specialists” when they actually mean conveyancers or barristers.

Solicitors are different.

The SRA Accounts Rules are specific, detailed, and unforgiving. Experience with law firms regulated by other bodies does not automatically transfer.

Ask specifically:

• How many SRA regulated solicitor firms do you act for

• Do you work with high street firms or niche practices

• Have you dealt with SRA inspections or investigations

Real experience shows in the detail of their answers.

Checking whether your accountant is acceptable to your professional indemnity insurer

This is often overlooked.

Some professional indemnity insurers expect solicitors to use suitably experienced accountants, particularly where client money is involved.

It is worth checking your policy wording or asking your broker whether there are expectations around financial advisers and accountants.

If your accountant lacks experience with solicitors, this can increase perceived risk.

The role of the COFA and how your accountant fits in

The Compliance Officer for Finance and Administration plays a key role in SRA compliance.

Your accountant should understand:

• The COFA’s responsibilities

• How financial reporting supports the COFA

• When issues should be escalated

In some cases, your accountant may act as an informal adviser to the COFA. That is fine, but only if they truly understand the role.

If your accountant has never worked alongside a COFA before, you may find yourself filling in gaps you did not realise existed.

Practical steps to verify your accountant properly

If I were advising a solicitor client from scratch, I would suggest the following structured approach.

Start with qualification checks:

• Confirm professional body membership

• Verify registration independently

• Ask about disciplinary history

Then move to experience:

• Number of SRA regulated clients

• Experience with SRA Accounts Rules

• History of accountants’ reports

Then assess competence:

• Ask scenario based questions

• Discuss systems and reconciliations

• Understand their reporting processes

Finally, assess communication:

• Are explanations clear

• Do they document advice

• Are they proactive about compliance

This process takes time, but it is far less painful than fixing a regulatory breach later.

Red flags I see repeatedly

Over the years, I have seen certain warning signs crop up again and again.

These include:

• Accountants who dismiss the SRA Accounts Rules as “overly cautious”

• A lack of written procedures

• Reliance on outdated guidance

• No solicitor specific clients

• Overconfidence without detail

If something feels off, trust that instinct.

Can the SRA reject an accountant’s work

Yes, in practice the SRA can challenge accountants’ reports or financial records if they believe the work is inadequate.

This does not always mean disciplinary action, but it can trigger:

• Follow up questions

• Requests for additional reports

• Increased scrutiny

In more serious cases, it can contribute to enforcement action against the solicitor or firm.

The SRA’s focus is always on the solicitor’s responsibility, not the accountant’s.

Should you change accountants if you are unsure

This is a difficult decision, especially if you have a long standing relationship.

However, from a regulatory perspective, loyalty does not outweigh risk.

If your accountant:

• Does not understand SRA requirements

• Is unwilling to engage with compliance issues

• Minimises regulatory concerns

Then it may be time to move on.

A good accountant will welcome scrutiny. They will understand why you are asking these questions.

The cost question and false economies

One final point I want to address is cost.

Specialist solicitor accountants often charge more than general practitioners. That is not because they are profiteering. It is because:

• The regulatory risk is higher

• The work is more complex

• The liability exposure is greater

Cutting costs here can be a false economy. I have seen firms spend tens of thousands fixing issues that could have been avoided with the right advice upfront.

My professional view as an accountant working with solicitors

In my opinion, solicitors should treat their accountant selection with the same seriousness as choosing a professional indemnity insurer.

You are not just buying a service. You are protecting your right to practise.

Checking whether your accountant is suitable from an SRA perspective is not about ticking boxes. It is about understanding, experience, and judgement.

If you are ever unsure, ask questions early. A competent accountant will never be offended by that. They will see it as a sign of a well run firm.

Final thoughts

The phrase “SRA-approved accountant” is misleading, but the underlying concern is entirely valid.

As a solicitor, you must ensure that anyone involved in your finances is properly qualified, experienced with SRA regulation, and capable of supporting your compliance obligations.

By checking professional registration, understanding experience, and asking the right questions, you can significantly reduce regulatory risk.

In a regulatory environment that continues to tighten, this is not optional. It is simply good practice.

If you take one thing away from this article, let it be this: the SRA holds you responsible, so choose advisers who are genuinely equipped to support you.

You may also find our guidance on Do all law firms need an accountant for SRA compliance and How does an accountant help with an SRA audit useful when reviewing related SRA and accounting obligations. For a broader overview of solicitor accounting and compliance topics you can visit our solicitors accounts rules hub which brings all related guidance together.