SAR report - structure and checking; what we need and what we do

Phase 1 the Structure

  • Planning.
  • Basic details setup or update.
  • Review of the accounting system.
  • Bank accounts;
  • completion of this section will depend on receiving replies to bank letters, which can take five weeks.
  • If an AR1 Accountant's report form is completed before the bank replies are received it needs to be qualified for this.
  • The alternative is to apply to SRA Information Directorate for an extension of time limits to avoid this qualification.
  • We recommend that the examination is started within three months of the year end which leaves three months before the deadline.

Phase 1 the Checking

What we need:

What we do:

  • All bank statements, client and office:
  • Copy pages relevant to the reconciliations.
  • Make a sample selection.
  • Make a cheque sample selection.
  • Obtain copies of a sample of paid cheques.
  • All monthly three-way-bank-reconciliations:
  • Select dates; two or more.
  • Take copies relevant to the dates.
  • Confirm balances with banks.
  • Working copy of the client cashbook (s):
  • Check the sample to the cashbook.
  • Collate the sample by matter
  • Make a list of matters relevant to the sample.
  • All client ledger accounts:
  • Copy pages relevant to the sample.

Phase 2 the Structure

  • Client ledger.
  • Client files.
  • Interest on client money.
  • Accounts subject to limited record keeping.

Phase 2 the Checking

What we need:

What we do:

  • Matter files relating to the sample:
  • Check the underlying transactions to the sample.
  • The assistance of the solicitor will speed this process.

Sample size:

  • A sample size is determined by the accountants' assessment of the risks at the start of the work.
  • This is likely to be 20% or more of the transactions on the client bank accounts.
  • Giving rise to examination of the underlying ledger records and client files.
  • Many of the client files will have been archived as being up to 18 months old.
  • Samples are also selected from the office bank accounts.

Other

Checking - what we need and what we do. Help us keep your fee down.