Financial Regulation

Important updates from the Society's Regulation Department are listed here as well as information regarding Reporting Accountant Reports and Regulations.

Solicitors Accounts Regulations 2023

2014 Regulations

Reporting Accountant’s Reports

Form – accounting periods commencing from 1 July 2023

For all accounting periods commencing on or after 1 July 2023, please use the form Reporting Accountant’s Report 2023.

Form - accounting periods from 1 December 2014 to 30 June 2023.

For all accounting periods commencing on or after 1 December 2014 but before 30 June 2023, please use the form Reporting Accountant’s Report 2014.

Checklist

Before you submit the Reporting Accountants Report, please ensure you have completed the form correctly - read the checklist before submission.

FAQ

See answers to common questions below.


The 2023 regulations commenced on 1 July 2023 and apply to firms whose accounting period commenced on or after 1 July 2023.


You can access the new Regulations here: S.I. No. 118/2023 - Solicitors Accounts Regulations 2023. Sections 26 - 34 deal with reporting accountants reports.


Any solicitor’s practice in Ireland that holds clients’ monies must submit an annual reporting accountants report.


It is your obligation to ensure that the report is submitted by the reporting deadline. However, your reporting accountant must submit the report to the Society with a covering letter attached.


The firm’s compliance partner signs the report.

The compliance partner is a sole practitioner or solicitor who is a partner in a firm which is a partnership of solicitors who is nominated from time to time by the firm and notified in writing to the Society as the partner responsible for completing and signing on behalf of all the partners the Form of Acknowledgement


Yes, but you must notify the Society within fourteen days of any change in the compliance partner in the course of a practice year.


Your reporting accountants report should be submitted to the Society not later than 5 months after the practice’s accounting date (year-end date).


The 2023 Regulations allow for an application to be made in writing no later than 14 days before the accounting date for an extension of no longer than one month. This will be granted where Society is satisfied that it is appropriate in all of the circumstances to do so.


You will find the report here: Reporting Accountants Report 2023.


Please email the report to RAR@lawsociety.ie.


Yes, but you must notify the Society not later than 1 month prior to the current accounting date or in the case of a shorter accounting period, one month prior to the new accounting date. If the change would extend the accounting period to longer than 1 year the prior written consent of the Society is required.


In addition to the Law Society’s reporting accountants report you are required to furnish the Society with a copy of the accountant's report furnished to the Law Society of Northern Ireland. The accounting dates for the firms in respect of the reports furnished should be the same accounting date in both jurisdictions.


You will receive an arrears letter from the Society informing you that you are late in filing your annual reporting accountant’s report. If your report is still outstanding, you will receive a further letter from the Society calling you up to the next Law Society Regulation of Practice Committee meeting. If your report is received before the meeting, there is no need to attend before the committee.


No, if you do not hold any client’s monies you do not need to file an annual reporting accountant’s report. You must inform the Society that you do not hold any client’s monies and file a Statutory Declaration which is sworn and independently witnessed confirming this. If you start holding client’s monies at any stage, you must immediately inform the Society. For further information please email RAR@lawsociety.ie.


You must file an annual report with the Society. Your first report should be submitted five months after your first accounting date. This would normally mean that your first report will be submitted before you complete 17 months in practice.


Please email RAR@lawsociety.ie and a decision will be made based on the facts in your case.


A reporting accountant must be a member in practice of a Law Society approved body as per Regulation 26(4) of the Solicitors Account’s Regulations 2023 and they must apply to the Society for approval by submitting a copy of their current practicing certificate, copy confirmation of their current professional indemnity insurance details and a copy of their firms headed notepaper to the Society.


The level of professional indemnity insurance held by a reporting accountant must not be less than €500,000.


No, a spouse, co-habitee, parent, child, sibling, dependent, associate, partner, consultant, clerk or servant of the solicitor concerned or a person with whom the solicitor either directly or indirectly has a mutual business interest cannot act as a reporting accountant. It is the Society’s policy that, in the interest of objectivity, reporting accountants should be independent of the solicitor for whom they conduct the annual accountants report.


Yes, a reporting accountant should notify the Law Society in writing of their resignation or their cessation of operation as a reporting accountant, such notification to take place within 21 days of such resignation or cessation of operation. A reporting accountant shall provide the Society with reasons for such resignation or cessation unless the reporting accountant does not consider it appropriate to do so, in which case, the reporting accountant shall notify the Society accordingly.


Yes, you should notify the Society in writing of such change, resignation or cessation of operation, together with the reasons for same, not later than fourteen days after such change has taken place.


The Society requires that only funds lodged to the client account on or before the balancing date, which have not yet cleared the bank, should be reported to the Society as an outstanding lodgement. Where it is necessary to lodge monies to the client account after the balancing date or to correct a bookkeeping error, the existence of a deficit should be reported to the Society.


No, quarterly balancing statements must be completed but only the balancing statement for the accounting date and the balancing statement for the date six months before the accounting date are included in the report.


If, in the course of carrying out their examination of your accounting records, the reporting accountant forms an opinion or has reasonable ground to suspect that -

  • that there is a deficit of clients' funds in the practice which cannot be rectified within seven days; or

  • that there are entries in the accounting records which have been made to conceal the existence of a deficit

the reporting accountant may notify the Registrar of Solicitors directly of that opinion or those reasonable grounds.


You must list all client ledger balances outstanding two years or more as at the accounting date, disclosing the reason the balance is outstanding and, where appropriate, any action taken or proposed to clear the balances. This list will be provided at appendix 6 of the reporting accountants report. 


Under current legislation there is no provision to allow a solicitor to pay client money to anyone other than the beneficial owner without the written consent of the beneficial owner.


Please see the Closing Accountants Reports FAQ Document.


Please email your query to RAR@lawsociety.ie

Privacy - Law Society Inspections

View our Statement of Practice and Privacy Statement regarding investigation of solicitors' practices by the Law Society:

News/Guidance

Reporting Accountant's Reports

The Law Society is requesting that solicitors facing difficulty in filing their annual reports contact the Regulation Department.

Guidance: Banking Arrangements - January 2014

The Government introduced a guarantee of bank liabilities on 30 September 2008, for a period of two years, which was succeeded by the Eligible Liabilities Guarantee Scheme, which protected deposits in excess of €100,000.  The Eligible Liabilities Guarantee Scheme ended on 28th March 2013 with respect to any new deposits, thus considerably reducing the protection afforded to deposits held in solicitors' client accounts in the event of loss due to the insolvency of a bank.

The Deposit Guarantee Scheme continues to provide protection for retail deposits up to €100,000. This is a guarantee by the State and does not have an end date. Information on the Deposit Guarantee Scheme is available on www.centralbank.ie.

The Law Society is advised that the 1995 Regulations (SI 368 of 1995) governing the Deposit Guarantee Scheme provide that where a person maintains a deposit in a capacity as a trustee, the beneficiary is entitled to compensation as if the money was a deposit in a separate account in the name of the beneficiary.

The Regulations governing Deposit Guarantee Scheme do not specifically mention client accounts. However, the Law Society is advised that the underlying EU Directive (94/19/EC) to which the Regulations are meant to give effect to states: “Where the depositor is not absolutely entitled to the sums held in an account, the person who is absolutely entitled shall be covered by the guarantee.”

Furthermore, guidance on the Deposit Guarantee Scheme provided by the Central Bank on its website goes further by stating that money held in trust or in client accounts by solicitors and other professionals may be eligible if the underlying beneficiaries are eligible in their own right. The Law Society is advised that whilst this is correct with regard to trust accounts, there appears to be no legislative basis for the statement with regard to solicitors' accounts (other than trust accounts).

The Law Society has been in correspondence with the Department of Finance to request that the Regulations governing the Deposit Guarantee Scheme be amended to provide protection for individual clients of solicitors. The Department has informed the Law Society that the Minister acknowledges the Law Society’s concerns and the need to amend the legislation. An amendment is likely at the time the new EU Directive on Deposit Guarantee Schemes is transposed into Irish regulations, which is expected to be during 2014. The Department has stated that the Central Bank has confirmed that should a relevant situation arise, it intends paying appropriate compensation to any eligible beneficiary whose funds are held in a solicitor client account.

A list of banks licensed to take deposits is available on www.centralbank.ie. Solicitors are reminded that under the Solicitors Accounts Regulations 2001 (SI 421 of 2001) clients' moneys can be deposited only in a bank, or a branch thereof, situated in the State.

While the Law Society does not provide legal advice, it is advised that a solicitor placing clients' moneys with a bank eligible to hold client moneys in accordance with the requirements of the Solicitors Acts and the Solicitors Accounts Regulations is unlikely to incur liability to his or her client in the event that all or any part of the clients' moneys are lost due the bank's insolvency.

However, as there is no precedent, the Society cannot say that the matter is beyond doubt and the Society would recommend that each solicitor obtains agreement from his or her client with regard to the lodgment of moneys in a bank. The form of agreement specified under the heading Your Money in the Law Society’s precedent Terms and Conditions for Legal Services should be appropriate. This precedent can be accessed in the Precedents area of the site. 

Office Account bank cheques - February 2013

It has recently come to the attention of the Law Society that one of the financial institutions has advised their customers that they would no longer be returning the original of paid office bank account cheques.

The Solicitors Accounts Regulations 2001 as amended sets out the minimum accounting records which a solicitor should maintain in Regulation 20. Regulation 20(1)(f) requires a solicitor to maintain “the original of each paid cheque drawn on each client account, controlled trust account and non-controlled trust account, regularly procured by the solicitor from his or her bank or banks and maintained and kept by the solicitor in numerical sequence, together with the corresponding cheque stubs or requisition dockets.”

There is no requirement to maintain the same in relation to office bank account cheques.

In order to ensure continued compliance with the Regulations, each solicitor must ensure that their financial institution continues to return the original client account bank cheques.

The majority of practices did, as a matter of good practice, also obtain the return of the original office account cheques. The return of these office account cheques would appear to be a matter of private arrangement between the practice and their bank.