SOLICITORS’ ACCOUNT RULES
QUESTION 1:
QUESTION 4:
If you discover a breach of the accounts rules in that money has
been improperly withheld or withdrawn from a client account, Your law firm now has a new client, Albert. After your initial
what action you must take? meeting with him, you require that he transfers you £750 to be
held on account. Which one of the following purposes is for which
Please select the correct answer. Albert’s money can be legally held?
A Any money withheld or withdrawn from a client account in Please select the correct answer.
breach of the rules must be paid into the account within 24
hours. A To allow the law firm to carry out legal services for the client.
B Any money withheld or withdrawn from a client account in B To attract a better interest rate for the client.
breach of the rules must be paid into the account within 14
working days. C To pool money from multiple clients into one account,
providing higher interest rates for clients.
C Any money withheld or withdrawn from a client account in
breach of the rules must be immediately paid into the D To allow the law firm to safeguard the client’s money.
account or replaced.
E To provide allow the law firm to increase interest payments.
D Any money withheld or withdrawn from a client account in
breach of the rules must be paid into the account within 5 (easy)
working days.
E Any money withheld or withdrawn from a client account in
breach of the rules must be reported to the regulatory body QUESTION 5:
within 7 days and rectified immediately.
Faisal is a client of your law firm, and yesterday, he has sent
(medium) £2,500 to the firms. You give him a call, as the bill that you have
issued in relation to legal services was only for £1,800. He tells you
that the £1,800 payment is made to satisfy the bill and the
remaining £700 is to be held on trust for him by the firm due to
QUESTION 2: the high interest rates enjoyed by the firm.
You have been instructed by a new client, Mr Masood. Which one What should you do next?
of the following the name of his client account must include?
Please select the best answer.
Please select the correct answer.
A Send the £700 back to Faisal as that amount does not relate
A The word “client”. to the legal services you carry out for him.
B The matter details B Keep the £2,500 on the client account and hold the £700 on
trust for him.
C The name of the fee-earner
C Send the £2,500 back to Faisal as the amount does not relate
D The account number to the legal services you carry out for him.
E The name “Masood”. D Keep the £1,800 on the client account and transfer the other
£700 to the office account.
(easy)
E Keep the £2,500 on the client account and use the £700 for
legal services you will carry out for him in the future.
QUESTION 3:
(medium)
Anna, a finance officer at a mid-sized law firm, has to prepare the
monthly reconciliation statement. Which of the following will be
the figure she will arrive at as a result of this statement?
QUESTION 6:
Please select the correct answer.
Kelley is a client of a small local law firm. She believes she has not
A The difference in value between the different client been provided sufficient information about the third party
accounts. managed account used by the firm. What is the information she
was supposed to be provided by the firm?
B The difference in balance between the firm’s accounting
records and the actual bank statement. Please select the correct answer.
C The difference between the monthly drawings on the A That the relevant regulations that apply to a TPMA are the
account. same as the regulations applicable to client money within a
client account.
D The difference between credit and debit transactions.
B That they do not have a right to terminate their retainer with
E All of the above you on the basis that they are unhappy with the type of bank
chosen.
(medium)
C That they have a right to dispute any payment requests
made.
D That TPMAs are regulated by the Financial Conduct
Authority.
E That they have a right to request that you use a different
type of account (not a TPMA) in relation to their funds.
(hard)
Solicitors’ Accounts – Sample Questions and Answers | Page 1 of 15
, QUESTION 7: QUESTION 10:
You are a trainee solicitor in a law firm. You notice that £250 for a Samantha, a solicitor, has recently received various payments into
computer repair bill has been debited from the client account by her client account under different circumstances. Each of the
mistake. The error was identified the following day and rectified following describes a scenario under which she received money.
immediately by transferring the £250 into the client account from
the office account. Identify which of these would not meet the definition of 'client
money' under standard legal practice guidelines.
Please select the correct answer.
Please select the best answer.
A This is not a breach of the SRA Accounts Rules relating to the
circumstances in which client money may be withdrawn as it A Samantha received a payment intended to cover court fees
was rectified within 24 hours. and other disbursements related to a client's case.
B This is a breach of the SRA Accounts Rules relating to the B Samantha received money as a trustee appointed in a will to
circumstances in which client money may be withdrawn. manage an estate, which includes some ongoing legal
actions.
C This is a breach of the SRA Account Rules relating to the
circumstances in which client money may be withdrawn C Samantha received her fees for legal services that have been
unless one of the firm’s partners authorised the transaction. billed to the client and are due for payment.
D This is a breach of the SRA Accounts Rules relating to the D Samantha received funds that are to be passed on to a
circumstances in which client money may be withdrawn barrister who has also provided services for the same client.
unless a bill for £250 has been issued to the client.
E Samantha received funds which are to be held in a trust
E This is not a breach of the SRA Accounts Rules as the account for the benefit of her client until certain conditions
withdrawal was not deliberate. of their agreement are met.
(medium) (medium)
QUESTION 11:
QUESTION 8:
James, a solicitor, is holding £5,000 of client money from Thomas,
While preparing the Accountant’s Report, your firm’s accountant which was meant to cover potential litigation expenses. The case
discovers a significant breach of the SRA Accounts Rules. has recently settled and there are no further anticipated charges
or expenses. James is now considering the best course of action
Which one of the follow the accountant may submit to the SRA regarding the leftover client money.
upon discovering the breach?
Given that there is no longer a proper reason to hold the client
Please select the correct answer. money, what should James do with the £5,000 he holds for
Thomas?
A An incomplete report which does not include the breach.
Please select the best option.
B A qualified report.
A Return it within 28 days to Thomas.
C A partial report which does not include the breach.
B Return it promptly to Thomas.
D The full accountant’s report with a separate notification to
SRA including the details of the breach. C Return it as soon as practicable to Thomas.
E None of the above. D Return it immediately to Thomas.
(medium) E Return it within 3 months to Thomas.
(easy)
QUESTION 9:
QUESTION 12 – JOINT ACCOUNTS:
Hamza is a solicitor and she is having a Solicitors’ Regulation
Authority inspection tomorrow. The SRA requires solicitors such as A law firm manages a client account that at its peak held £350,000
Hamza to store all accounting records. How many years old must during the last financial year. The firm engaged a local accounting
Hamza’s oldest records be as a minimum? firm to audit their client account statements. The accounts were
audited and signed off by a certified public accountant within
Please select the correct answer. three months after the year-end. However, the accountants used
are primarily experienced in corporate, not trust account audits.
A 3 years old
Has the law firm adhered to the SRA Accounts Rules regarding the
B 4 years old audit of their client account?
C 5 years old Please select the correct statement.
D 6 years old A Yes, the accounts have been appropriately signed off by a
qualified accountant within the required timeframe.
E 10 years old
B No, the accounts must be audited by a chartered accountant
(easy) specifically trained in client money protection.
C No, the accounting firm used does not specialise in trust
account audits, which does not meet the SRA’s specificity
requirements for client account audits.
D Yes, as long as the accounts are audited by a certified
accountant, the specific expertise in trust accounts is not
necessary.
E No, the law firm failed to report the audit results to the SRA,
which is a breach of the accounts rules.
Solicitors’ Accounts – Sample Questions and Answers | Page 2 of 15
(hard)
QUESTION 1:
QUESTION 4:
If you discover a breach of the accounts rules in that money has
been improperly withheld or withdrawn from a client account, Your law firm now has a new client, Albert. After your initial
what action you must take? meeting with him, you require that he transfers you £750 to be
held on account. Which one of the following purposes is for which
Please select the correct answer. Albert’s money can be legally held?
A Any money withheld or withdrawn from a client account in Please select the correct answer.
breach of the rules must be paid into the account within 24
hours. A To allow the law firm to carry out legal services for the client.
B Any money withheld or withdrawn from a client account in B To attract a better interest rate for the client.
breach of the rules must be paid into the account within 14
working days. C To pool money from multiple clients into one account,
providing higher interest rates for clients.
C Any money withheld or withdrawn from a client account in
breach of the rules must be immediately paid into the D To allow the law firm to safeguard the client’s money.
account or replaced.
E To provide allow the law firm to increase interest payments.
D Any money withheld or withdrawn from a client account in
breach of the rules must be paid into the account within 5 (easy)
working days.
E Any money withheld or withdrawn from a client account in
breach of the rules must be reported to the regulatory body QUESTION 5:
within 7 days and rectified immediately.
Faisal is a client of your law firm, and yesterday, he has sent
(medium) £2,500 to the firms. You give him a call, as the bill that you have
issued in relation to legal services was only for £1,800. He tells you
that the £1,800 payment is made to satisfy the bill and the
remaining £700 is to be held on trust for him by the firm due to
QUESTION 2: the high interest rates enjoyed by the firm.
You have been instructed by a new client, Mr Masood. Which one What should you do next?
of the following the name of his client account must include?
Please select the best answer.
Please select the correct answer.
A Send the £700 back to Faisal as that amount does not relate
A The word “client”. to the legal services you carry out for him.
B The matter details B Keep the £2,500 on the client account and hold the £700 on
trust for him.
C The name of the fee-earner
C Send the £2,500 back to Faisal as the amount does not relate
D The account number to the legal services you carry out for him.
E The name “Masood”. D Keep the £1,800 on the client account and transfer the other
£700 to the office account.
(easy)
E Keep the £2,500 on the client account and use the £700 for
legal services you will carry out for him in the future.
QUESTION 3:
(medium)
Anna, a finance officer at a mid-sized law firm, has to prepare the
monthly reconciliation statement. Which of the following will be
the figure she will arrive at as a result of this statement?
QUESTION 6:
Please select the correct answer.
Kelley is a client of a small local law firm. She believes she has not
A The difference in value between the different client been provided sufficient information about the third party
accounts. managed account used by the firm. What is the information she
was supposed to be provided by the firm?
B The difference in balance between the firm’s accounting
records and the actual bank statement. Please select the correct answer.
C The difference between the monthly drawings on the A That the relevant regulations that apply to a TPMA are the
account. same as the regulations applicable to client money within a
client account.
D The difference between credit and debit transactions.
B That they do not have a right to terminate their retainer with
E All of the above you on the basis that they are unhappy with the type of bank
chosen.
(medium)
C That they have a right to dispute any payment requests
made.
D That TPMAs are regulated by the Financial Conduct
Authority.
E That they have a right to request that you use a different
type of account (not a TPMA) in relation to their funds.
(hard)
Solicitors’ Accounts – Sample Questions and Answers | Page 1 of 15
, QUESTION 7: QUESTION 10:
You are a trainee solicitor in a law firm. You notice that £250 for a Samantha, a solicitor, has recently received various payments into
computer repair bill has been debited from the client account by her client account under different circumstances. Each of the
mistake. The error was identified the following day and rectified following describes a scenario under which she received money.
immediately by transferring the £250 into the client account from
the office account. Identify which of these would not meet the definition of 'client
money' under standard legal practice guidelines.
Please select the correct answer.
Please select the best answer.
A This is not a breach of the SRA Accounts Rules relating to the
circumstances in which client money may be withdrawn as it A Samantha received a payment intended to cover court fees
was rectified within 24 hours. and other disbursements related to a client's case.
B This is a breach of the SRA Accounts Rules relating to the B Samantha received money as a trustee appointed in a will to
circumstances in which client money may be withdrawn. manage an estate, which includes some ongoing legal
actions.
C This is a breach of the SRA Account Rules relating to the
circumstances in which client money may be withdrawn C Samantha received her fees for legal services that have been
unless one of the firm’s partners authorised the transaction. billed to the client and are due for payment.
D This is a breach of the SRA Accounts Rules relating to the D Samantha received funds that are to be passed on to a
circumstances in which client money may be withdrawn barrister who has also provided services for the same client.
unless a bill for £250 has been issued to the client.
E Samantha received funds which are to be held in a trust
E This is not a breach of the SRA Accounts Rules as the account for the benefit of her client until certain conditions
withdrawal was not deliberate. of their agreement are met.
(medium) (medium)
QUESTION 11:
QUESTION 8:
James, a solicitor, is holding £5,000 of client money from Thomas,
While preparing the Accountant’s Report, your firm’s accountant which was meant to cover potential litigation expenses. The case
discovers a significant breach of the SRA Accounts Rules. has recently settled and there are no further anticipated charges
or expenses. James is now considering the best course of action
Which one of the follow the accountant may submit to the SRA regarding the leftover client money.
upon discovering the breach?
Given that there is no longer a proper reason to hold the client
Please select the correct answer. money, what should James do with the £5,000 he holds for
Thomas?
A An incomplete report which does not include the breach.
Please select the best option.
B A qualified report.
A Return it within 28 days to Thomas.
C A partial report which does not include the breach.
B Return it promptly to Thomas.
D The full accountant’s report with a separate notification to
SRA including the details of the breach. C Return it as soon as practicable to Thomas.
E None of the above. D Return it immediately to Thomas.
(medium) E Return it within 3 months to Thomas.
(easy)
QUESTION 9:
QUESTION 12 – JOINT ACCOUNTS:
Hamza is a solicitor and she is having a Solicitors’ Regulation
Authority inspection tomorrow. The SRA requires solicitors such as A law firm manages a client account that at its peak held £350,000
Hamza to store all accounting records. How many years old must during the last financial year. The firm engaged a local accounting
Hamza’s oldest records be as a minimum? firm to audit their client account statements. The accounts were
audited and signed off by a certified public accountant within
Please select the correct answer. three months after the year-end. However, the accountants used
are primarily experienced in corporate, not trust account audits.
A 3 years old
Has the law firm adhered to the SRA Accounts Rules regarding the
B 4 years old audit of their client account?
C 5 years old Please select the correct statement.
D 6 years old A Yes, the accounts have been appropriately signed off by a
qualified accountant within the required timeframe.
E 10 years old
B No, the accounts must be audited by a chartered accountant
(easy) specifically trained in client money protection.
C No, the accounting firm used does not specialise in trust
account audits, which does not meet the SRA’s specificity
requirements for client account audits.
D Yes, as long as the accounts are audited by a certified
accountant, the specific expertise in trust accounts is not
necessary.
E No, the law firm failed to report the audit results to the SRA,
which is a breach of the accounts rules.
Solicitors’ Accounts – Sample Questions and Answers | Page 2 of 15
(hard)
