(1) For the purposes of giving an accountant's report, an accountant shall ascertain from the solicitor particulars of all banks accounts (excluding trust bank accounts) kept, maintained or operated by the solicitor in connection with his practice at any time during the accounting period to which his reports relates and subject to subrule (2) make the following examination of the books, accounts and other relevant documents of the solicitor-
(a) so examine the book-keeping system in every office of the solicitor as to enable the accountant to verify that such system complies with the Solicitor's Account Rules 1990, and if so designed that-
(i) an appropriate ledger account is kept for each client;
(ii) such ledger accounts show separately from other information particulars of all clients, money received, held or paid on account of each client;
(iii) transaction relating to clients' money and any other money dealt with through a client account are recorded in the solicitor's book so as to distinguish such transactions from transactions relating to any other money received, held or paid by the solicitor;
(b) make test checks of postings to clients' ledger accounts from records of receipts and payments of clients' money and make test checks of the costs of such accounts and records;
(c) compare a sample of lodgement into the payments from the client account as shown in bank statements with the solicitor's records of receipts and payments of clients' money;
(d) enquire into and test check the system of recording costs and of making transfer in respect of costs from the client account;
(e) make a test examination of such documents as he shall request the solicitor to produce to him with the object of ascertaining and confirming-
(i) the the financial transactions, (including those giving rise to transfers from one ledger account to another) evidenced by such documents, are in accordance with the Solicitors, Account Rules 1990; and
(ii) that the entries in clients' ledger accounts reflect those transactions in a manner complying with the Solicitors' Account Rules 1990;
(f) extract (or check extractions of) balances of the clients' ledger accounts during the accounting period under review at not fewer that two dates selected by the accountant (one of which may be the last day of the accounting period), and at each such date-
(i) compare the total as shown by such ledger accounts of the liabilities to the clients, including those for whom trust money is held in the client account, with the cash book balance on client account; and
(ii) reconcile that cash book balance with the client account balance as confirmed direct to the accountant by the bank;
Provided that in the case where a solicitor uses a computerised or mechanical system of accounting which automatically produces an extraction of all client ledger balances, the requirement of his paragraph that all client ledger balances extracted on the list produced by the computer or machine must be checked against the individual records of ledger accounts is waived provided the accountant is satisfied that a satisfactory system or control is in operation, carries out a test check of the extraction against the individual records and specifies in this report that he has relied on this manner; however, the remainder of the paragraph is not waived and the appropriate comparisons must continue to be made at no fewer that two dates;
(g) satisfy himself that reconciliation statements have been kept in accordance with the Solicitors' Account Rules 1990;
(h) make a test examination of the clients' ledger accounts in order to ascertain whether payments from the client account have been made on any individual account in excess of money held on behalf of that client;
(i) peruse such office ledger and cash accounts and bank statements as the solicitor maintains with a view to ascertaining whether any client's money has not been paid into a client account;
(j) ask for such information and explanations as he may require arising out of paragraph (a) to (i).
(2) Nothing in subrule (1) shall require the accountant-
(a) to extend his enquiries beyond the information contained in the relevant documents relating to any client's matter produced to him supplemented by such information and explanations as he may obtain from the solicitor;
(b) to enquire into the stocks, shares, other securities or documents of title held by the solicitor on behalf of his clients;
(c) to consider whether the books of account of the solicitor have been properly written up in accordance with the Solicitors' Account Rules 1990, at any time other than the time as at which his examination of those books and accounts takes place.
(3) If after making an examination in accordance with subrules (1) and (2), it appears to the accountant that there is evidence that the Solicitors' Account Rules 1990 have not been complied with, he shall make such further examination as he considers necessary in order to complete his report with or without qualification.
Last checked: 11 Nov 2010