SRA: Reporting Accountants work on bank balances
Robert Blech · Posted on: March 16th 2026 · read
Bank letters have traditionally been a staple of the work that Reporting Accountants (RAs) do as part of their work on confirming the balances that were held by clients in their bank accounts.
In more recent times, however their effectiveness and usefulness have been questioned and less reliance placed on them in this area of work. There are a number of reasons for this.
Firstly, the chances of a bank confirmation letter showing a different balance from the statement where the statement is incorrect is rare. Normally where a discrepancy does exist it is because the bank letter itself is incorrect.
Secondly, the bank letter may state all of the accounts that a particular law firm holds with them, but the practice may have accounts with another institution which the RA hasn’t been informed of and therefore wouldn’t know to contact them. So, from a completeness standpoint, they have their limitations.
However, in the post Axiom world, the use of bank letters has been revalued, and use reconsidered. Much of the role of the bank letters has focussed on the figures rather than their other values. Firstly, the type of account is something the RA should check. Rule 3.2 (b) of the Accounts Rules states that the accounts have to have the word “client” to distinguish it from any other type of account held. This in itself does not mean that the account is actually a client account and the monies ringfenced.
Rule 3.2 (b) of the Accounts Rules states that the accounts have to have the word “client” to distinguish it from any other type of account held. This in itself does not mean that the account is actually a client account and the monies ringfenced.
Bank account names can be changed by the user online and so you could have a business account which has been named as client one. It is therefore important for the RA to check the account type and have this confirmed.
In addition, bank letters normally state if there are any securities on the accounts which they include. As a client account, there should obviously be no security on such accounts. If any are detailed in the bank letter, the RA should investigate this urgently.
"Whilst there is a reliance on the professional judgement of the RA as to how they reach their conclusions, some changes to the Accounts Rules or guidance on the definition of a client bank account and the use of bank letters would be recommended."
