If your law firm handles client money, then SRA compliance isn’t optional, it’s essential. And when the Solicitors Regulation Authority (SRA) decides it’s time for an audit, the last thing you want is to be caught off-guard.
Whether it’s your first time or you’ve been audited before, proper preparation can make the difference between a smooth process and a regulatory nightmare.
In this post, we break down exactly what you need to know about preparing for an SRA audit, what to expect, and how to stay compliant, without the stress.
What Is an SRA Audit?
An SRA audit is a formal review of your law firm’s handling of client and office accounts, ensuring full compliance with the SRA Accounts Rules. The goal? To protect client money, ensure transparency, and confirm that law firms are operating with financial integrity.
Audits may be:
- Routine inspections based on your risk profile.
- Triggered by complaints or red flags.
- Required when you switch accountants or close your practice.
What Will the SRA Be Looking At?
During an audit, the SRA will typically review:
- Client account transactions and reconciliations.
- Transfers between client and office accounts.
- Timing and accuracy of payments and receipts.
- Compliance with Accounts Rules (including Rule 8 on residual balances).
- Records of disbursements and billing.
- Internal systems and financial controls.
- Staff roles and segregation of duties.
The SRA wants to see that your firm handles client money responsibly and consistently.
Common SRA Audit Triggers
Wondering if an audit might be around the corner? Here are common triggers:
- Repeated breaches of SRA rules.
- Complaints from clients or third parties.
- Irregularities in annual accountant reports.
- Late filing or incomplete financial records.
- Unexpected changes in financial activity.
- Switching to a new legal cashier or accountant
5 Things You Can Do to Prepare for an SRA Audit
1. Keep Your Records Up to Date
Make sure your client and office accounts are properly maintained. Transactions should be recorded promptly and accurately and should match the supporting documentation.
A good legal cashier will help ensure your books are audit-ready every day, not just once a year.
2. Reconcile Regularly
Reconcile all client account transactions at least once every five weeks (preferably monthly or weekly). This includes:
- Bank statements.
- Client ledgers.
- Trial balances.
Reconciliation reports should be clearly documented and stored for reference.
3. Maintain Internal Controls
The SRA wants to see that you’re managing risk. Make sure:
- No single person has full control over all financial processes.
- You perform regular internal reviews.
- All staff involved in finance are properly trained.
4. Be Audit-Ready at All Times
Don’t wait until you receive an audit notice to get organized. Your firm should operate as if an audit could happen at any time.
This means maintaining clear systems, up-to-date logs, and having easy access to all necessary records.
5. Work with a Specialist Legal Cashier
Many law firms fail audits not because of fraud or intentional wrongdoing, but due to lack of specialist knowledge around SRA rules.
A trained legal cashier understands the nuances of client account handling and ensures your processes align with regulatory requirements.
What Happens If You’re Not Prepared?
Failing an SRA audit can lead to:
- Regulatory fines.
- Mandatory remedial actions.
- Damage to your firm’s reputation.
- In serious cases, suspension or closure of your practice.
Don’t leave your firm exposed. Compliance is not optional.
How Asegun Ltd Helps Law Firms Stay SRA-Compliant
At Asegun Limited, we offer expert SRA-compliant legal cashiering services for law firms across the UK. With over 25 years of experience, our team ensures that:
- Your client accounts are accurate and up to date.
- All records and reconciliations meet audit standards.
- Your firm stays prepared and confident, even under inspection.
Whether you’re expecting an audit or simply want to strengthen your systems, we’ve got you covered.
Final Thoughts
An SRA audit doesn’t have to be stressful. With the right preparation, proper internal controls, and expert financial support, you can navigate it smoothly, and even use it as an opportunity to strengthen your firm’s financial operations.
Stay ready, stay compliant, and stay focused on serving your clients with confidence.
Is your law firm audit-ready?
Contact Asegun Ltd today to ensure your legal accounts are fully compliant, professionally managed, and prepared for any SRA inspection.
