What Is the Process for Submitting an Accountants’ Report to the SRA?

At Towerstone Accountants we provide specialist accountancy services for solicitors and law firms operating under SRA regulation. This article has been written to explain What is the process for submitting an accountants’ report to the SRA 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.

For many solicitors, the accountants’ report is one of those regulatory obligations that sits quietly in the background until it suddenly becomes urgent. It is rarely part of day to day practice, yet when it is required, the consequences of getting it wrong can be serious. Late submission, incomplete reports, or misunderstandings about whether a report is needed at all regularly lead to unnecessary stress and, in some cases, regulatory scrutiny.

In this article, I will walk through the full process for submitting an accountants’ report to the SRA, step by step, in plain English. I will explain when a report is required, who can prepare it, what it covers, how it is submitted, and what happens if issues are identified. This is based on practical experience working with solicitor firms and interpreting current UK regulatory guidance.

What an accountants’ report actually is

An accountants’ report is a formal report prepared by an independent accountant on a solicitor firm’s compliance with the SRA Accounts Rules.

Its purpose is not to check profitability or tax efficiency. Instead, it focuses on whether the firm has handled client money properly and maintained appropriate accounting systems and controls.

The report is submitted to the Solicitors Regulation Authority in specific circumstances and within defined time limits.

When an accountants’ report is required

Not all solicitor firms are required to submit an accountants’ report every year. This is one of the most misunderstood aspects of the process.

In general terms, a report is required if the firm has held or received client money during the relevant accounting period, unless a specific exemption applies.

Whether a report is required depends on factors such as:

• Whether client money was held at any point

• The amount of client money held

• How the firm operates

• Whether the firm falls within an exemption

Many firms assume they are exempt without properly checking, which is risky. If a report is required and not submitted, this can itself be a regulatory breach.

Common exemptions from the accountants’ report

Some firms are exempt from submitting a report, even if they deal with client money.

Examples of exemptions may include situations where:

• Client money was held only briefly

• The firm meets specific conditions set out in the Accounts Rules

• The firm operates under certain alternative arrangements

However, exemptions are conditional and fact specific. They are not blanket exemptions for certain types of firms.

I always advise solicitors to document clearly why they believe an exemption applies. If the SRA later asks, you need to be able to justify that decision.

The reporting period and deadlines

The accountants’ report relates to a specific accounting period, usually aligned with the firm’s financial year.

The deadline for submitting the report is typically:

• Six months after the end of the accounting period

For example, if a firm’s year end is 31 March, the accountants’ report would usually be due by 30 September.

Missing this deadline is one of the most common issues I see, often because the requirement was not identified early enough.

Who can prepare an accountants’ report

Not every accountant is permitted to prepare an accountants’ report for a solicitor firm.

The reporting accountant must:

• Be a member of a recognised UK professional body

• Be independent of the firm

• Have appropriate experience

• Understand the SRA Accounts Rules

Independence is particularly important. An accountant who is too closely involved in the firm’s day to day financial management may not be eligible to act as the reporting accountant.

This is why many firms use one accountant for ongoing support and a separate reporting accountant for the formal report.

Independence and conflicts of interest

The SRA expects reporting accountants to be objective and independent.

This means the accountant should not:

• Be a partner or director of the firm

• Act as the firm’s COFA

• Be involved in authorising client account transactions

If independence is compromised, the report may not be accepted.

A competent reporting accountant will assess independence at the outset and decline the engagement if there is a conflict.

Appointing the reporting accountant

The process usually begins with formally appointing the reporting accountant.

This involves:

• Agreeing the scope of work

• Confirming independence

• Providing access to records

• Setting a timetable

It is good practice to engage the reporting accountant well before the deadline, particularly if this is the firm’s first report or if there have been changes during the year.

Preparing for the accountants’ report

Preparation is key to a smooth reporting process.

Before the accountant begins their work, the firm should ensure that:

• Client and office accounts are up to date

• Reconciliations have been completed

• Supporting documentation is available

• Policies and procedures are documented

An accountant for solicitors will often help firms prepare by reviewing records in advance and identifying issues early.

What the reporting accountant will review

The accountants’ report focuses primarily on compliance with the Accounts Rules.

This typically includes:

• Client bank account statements

• Client ledgers

• Office account records

• Reconciliations

• Transfer procedures

• Residual balances

The accountant is looking for evidence that client money has been handled properly and that systems are robust.

They are not auditing the firm’s entire financial position, but the work is still detailed and methodical.

The importance of reconciliations

Client account reconciliations are a central part of the report.

The reporting accountant will usually expect to see:

• Regular reconciliations

• Evidence they were reviewed

• Clear explanations for differences

Poor or missing reconciliations are one of the most common causes of qualified reports.

Identifying breaches during the review

If the reporting accountant identifies breaches of the Accounts Rules, these must be documented.

Not all breaches are treated equally. The report distinguishes between:

• Trivial breaches

• Non trivial breaches

The distinction matters, because non trivial breaches must be reported to the SRA.

The reporting accountant does not decide on enforcement action, but they do have a duty to report material issues.

Discussing findings before finalising the report

A good reporting accountant will discuss their findings with the firm before finalising the report.

This allows:

• Clarification of misunderstandings

• Correction of errors where possible

• Context to be provided

However, this does not mean issues can simply be ignored. The final report must reflect the true position.

Completing the accountants’ report

The report itself follows a prescribed format set out by the SRA.

It includes:

• Details of the firm

• The accounting period covered

• The accountant’s findings

• Any breaches identified

The report is signed by the reporting accountant, confirming their professional opinion.

Submitting the report to the SRA

Once completed, the report is submitted to the SRA.

Submission is usually done electronically, in line with the SRA’s current processes.

It is the firm’s responsibility, not the accountant’s, to ensure the report is submitted on time.

I always recommend that firms:

• Keep proof of submission

• Retain a copy of the report

• Record the submission date internally

What happens after submission

In many cases, nothing further happens.

If the report is unqualified and no material breaches are identified, the SRA may simply acknowledge receipt.

If breaches are reported, the SRA may:

• Request further information

• Ask for explanations

• Require remedial action

• Increase monitoring

This does not automatically mean disciplinary action, but it does mean increased scrutiny.

The role of the COFA in the process

The Compliance Officer for Finance and Administration plays a central role.

The COFA is responsible for:

• Overseeing financial compliance

• Ensuring breaches are reported

• Liaising with the SRA

An accountants’ report often supports the COFA’s work and provides independent assurance.

Common problems I see with accountants’ reports

There are several recurring issues that cause difficulty.

These include:

• Assuming no report is required without checking

• Appointing an ineligible accountant

• Leaving preparation too late

• Poor quality records

• Misunderstanding what constitutes a breach

Most of these problems are avoidable with early planning.

What happens if a report is late or not submitted

Failure to submit a required report is itself a regulatory issue.

Possible consequences include:

• Follow up by the SRA

• Requests for explanation

• Increased regulatory scrutiny

In serious cases, persistent failure can contribute to enforcement action.

If a report is going to be late, it is far better to engage with the SRA proactively than to say nothing.

The difference between the accountants’ report and statutory accounts

It is important not to confuse these two documents.

Statutory accounts:

• Show financial performance and position

• Are prepared under accounting standards

• Are filed at Companies House

The accountants’ report:

• Focuses on client money compliance

• Is prepared under SRA rules

• Is submitted to the SRA

They serve very different purposes.

Using the report as a management tool

While the report is a regulatory requirement, it can also be a useful management tool.

Findings often highlight:

• Weaknesses in systems

• Training needs

• Process improvements

Firms that engage constructively with the process often strengthen their overall financial governance as a result.

My professional perspective

In my experience, the accountants’ report is most painful when it is treated as an afterthought.

When firms understand the process, prepare properly, and work with experienced advisers, it becomes a routine compliance exercise rather than a source of anxiety.

The key is to view the report as part of ongoing financial management, not a once a year hurdle.

Final thoughts

Submitting an accountants’ report to the SRA is a structured process with clear expectations, but it requires careful attention to detail.

Understanding when a report is required, appointing the right reporting accountant, preparing records properly, and meeting deadlines all play a role in a smooth outcome.

For solicitors, the report is not just about compliance. It is about demonstrating professionalism, protecting client money, and maintaining the trust that underpins the legal profession.

You may also find our guidance on How does an accountant help with an SRA audit and What should solicitors include in their accountants’ report to the SRA 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.