APPENDIX 3
LAW SOCIETY GUIDELINES
ACCOUNTING PROCEDURES AND SYSTEMS
1. Introduction
1.1 These guidelines, published under rule 29 of the Solicitors’ Accounts Rules 1998, are intended to be a benchmark or broad statement of good practice requirements which should be present in an effective regime for the proper control of client money and controlled trust money. They should therefore be of positive assistance to firms in establishing or reviewing appropriate procedures and systems. They do not override, or detract from the need to comply fully with, the accounts rules.
1.2 It should be noted that these guidelines apply equally to client money and to controlled trust money.
1.3 References to partners or firms in the guidelines are intended to include sole practitioners, recognised bodies and their directors.
2. General
2.1 Compliance with the accounts rules is the equal responsibility of all partners in a firm. They should establish policies and systems to ensure that the firm complies fully with the rules. Responsibility for day-to-day supervision may be delegated to one or more partners to enable effective control to be exercised. Delegation of total responsibility to a cashier or book-keeper is not acceptable.
2.2 The firm should hold a copy of the current version of the Solicitors’ Accounts Rules. The person who maintains the books of account must have a full knowledge of the requirements of the rules and the accounting requirements of solicitors’ firms.
2.3 Proper books of account should be maintained on the double-entry principle. They should be legible, up to date and contain narratives with the entries which identify and/or provide adequate information about the transaction. Entries should be made in chronological order and the current balance should be shown on client ledger accounts, or be readily ascertainable, in accordance with rule 32(5).
2.4 Ledger accounts for clients, other persons or controlled trusts should include the name of the client or other person or controlled trust and contain a heading which provides a description of the matter or transaction.
2.5 Separate designated client accounts should be brought within the ambit of the systems and procedures for the control of client money and controlled trust money – including reconciliations (see 5.4 below).
2.6 Manual systems for recording client money and controlled trust money are capable of complying with these guidelines and there is no requirement on firms to adopt computerised systems. A computer system, with suitable support procedures will, however, usually provide an efficient means of producing the accounts and associated control information.
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