Reconciliations & record-keeping
Regular reconciliations and complete accounting records demonstrate that client money is intact and properly accounted for.
What "Reconciliations & record-keeping" covers
- Keep accurate, contemporaneous and chronological records of all dealings with client money: rule 8.1.
- Complete a reconciliation of every client account at least every five weeks: rule 8.3.
- The reconciliation is a three-way check: the bank or building society statement balance, the cash book balance, and the total of the client ledger balances must agree.
- The reconciliation must be signed off by the COFA or a manager of the firm: rule 8.3.
- Promptly investigate and resolve any differences shown by the reconciliation.
- Retain accounting records, including reconciliations and bank statements, for at least six years: rule 13.
- Obtain an accountant's report within six months of the end of the accounting period, and deliver it to the SRA if it is qualified: rule 12 (subject to exemptions for low-value holdings and Legal Aid Agency money).
Key cases & statutes
The authorities and provisions most likely to matter for this subtopic:
How it's tested in SQE1
SQE1 uses single best answer questions: a short factual scenario, one precise question, and five options of which only one is the best answer on the law applied to the facts. For reconciliations & record-keeping, expect to be asked what the correct legal position is, what a party may or must do, or which outcome follows — with more than one option looking arguable. Reading the facts carefully and eliminating the near-misses is the skill that earns the mark.
Where candidates lose marks
- Missing the five-week deadline for a client-account reconciliation.
- Leaving reconciliation differences unresolved.
- Failing to obtain or, where qualified, to deliver the accountant's report.
Learn this subtopic in the course
A video lesson, notes and exam-style practice on reconciliations & record-keeping.
FAQ
Is reconciliations & record-keeping tested on SQE1?
Yes — reconciliations & record-keeping is part of the SQE1 Solicitors Accounts syllabus (FLK2) and can appear in single best answer questions.
How is reconciliations & record-keeping examined in SQE1?
SQE1 tests it by application: you're given a realistic scenario and choose the single best answer from five options. The focus is on using the law correctly, not reciting it — knowing the leading authorities (rule 8.1 (accurate records), rule 8.3 (five-week reconciliation)) helps.