COFA off the hook?

The SRA’s recent announcement that the Accountants Report is to remain also saw the scrapping of the proposal for the COFA to sign a declaration that the firm is compliant with the Accounts Rules. So no doubt many a COFA across England and Wales will have given a big sigh of relief! But does this actually change anything…we expect not! COFAs still have their obligations to take reasonable steps to ensure that the firm and all those employed within it comply with the Accounts Rules and to report material breaches to the SRA. Although the Accountants Report is considered by many as a costly and time consuming exercise, the thought of this being removed was a cause for concern for many COFAs as they place great reliance on this review in support of them being able to discharge their obligations. In many instances it can be seen that COFAs place too much reliance on the Accountants role in compiling the annual report, this is often at the expense of having sufficient controls and monitoring procedures on an ongoing basis throughout the year. Processes which should form an ongoing and integral part of the internal accounts and reporting systems within the firm.

Although the reporting accountant is an important tool in verifying compliance, it should be one of many processes adopted by the COFA to monitor compliance. Appropriate controls and reports should be in place on timely basis throughout the year. A firm may not consider themselves large enough to warrant a having full a ‘Compliance Plan’ in place, but they do need to ensure there are appropriate procedures to be able to demonstrate that the COFA is discharging their principle responsibilities.

Providing both Accountant’s Reports and advising COFA’s our experienced team advises firms on the appropriate compliance procedures for their practice.