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Why we love a three-way client money reconciliation

Emphasis on the comparison between the cashbook balance, bank statements, and matter balance listing will help firms comply with the Accounts Rules, explains Samantha Mason

11 April 2017

Many solicitor practices have March or April financial year ends and, as a result, spring is the joyous time of year when firms will be preparing to welcome the accountants for the annual SRA Accounts Rules examination.

Most partners, managers, and accounting staff within the solicitor firm will be well aware of the rule changes introduced last year, which shifted the requirement of the accountant to undertake prescriptive testing to that of utilising ‘professional judgement’ to decide what work is required and what information we examine.

One of the key areas we accountants love to test, and exercise our professional judgement upon, is a thorough examination of a firm’s three-way reconciliation. This is the comparison between the balance of client money recorded in the firm’s cashbook, the bank statements, and the matter balance listing.

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