Look out for the rules reviews

Accounts rules review

As flagged in the August eZine, the Society has been working with a number of members and other stakeholders on a review of the existing accounts rules.

Participants in the project have worked in groups on different sections of the rules and these groups have now produced recommendations for change. The Society will now hold a consultation exercise to allow the wider membership to review and comment on the proposals. The proposed changes will be available on the Society's website from 19 November and the consultation period will run until 10 January 2011. The Society is keen to gather as many contributions as possible during the consultation exercise.

Background

The Guarantee Fund Committee agreed that a comprehensive review of the accounts rules should take place to address the following drivers:

• possible changes to business models and the Society's regulatory model
• changes in business practice
• identified issues with existing rules.

Objectives

The objectives of the review were subsequently agreed as being to:

• challenge the need for all existing rules
• simplify and streamline the rules where possible
• ensure that the rules are suitable for all types of approved business model
• ensure that the rules support risk based regulation
• strengthen or clarify the rules where required
• reflect best practice from other UK jurisdictions.

The review

Working groups were established consisting of Society staff from Financial Compliance and Professional Practice, Guarantee Fund Committee members (chairing), members from a variety of firms and representatives of SOLAS (Society of Legal Accountants in Scotland), and accounting firms working with legal clients on rule compliance. The membership of these groups ensured that the perspectives of diverse practitioners, advisers and regulators were brought to the process.

Over a number of meetings each of these groups have produced recommendations which have subsequently been approved for consultation by the Guarantee Fund Committee.

The proposed rule changes can be categorised as offering the following benefits:

• changes/efficiencies which reduce regulatory burdens and costs to members;
• changes which support the Society's role as a risk based regulator
• changes which strengthen the Society's ability to effectively manage significant risks to the profession, Guarantee Fund and public
• useful clarifications to assist firms in managing their own risks
• necessary housekeeping.

Next steps

Full details of the proposals will appear on the Society's website on 19 November. The information presented will highlight all proposed changes alongside the existing rules for comparison purposes. The rationale and expected benefits will be detailed in each case.

The process leading to approval and implementation of any changes to the accounts rules is as set out in the article below on the practice rules.

Practice rules consolidation project

As also flagged in the August eZine, the Society has been working on a project to consolidate the existing practice rules into a more consistent, accessible and user-friendly format.

The draft consolidated rules will be available on the Society's website from 19 November and the consultation period will run until 10 January 2011. Please let the Society have your comments, queries and contributions - all will be welcomed.

Aims

The draft aims to:

• provide a "one stop shop" for the vast bulk of the rules which affect daily practice, with a provision at the start specifying what rules apply to whom and when;
• lay out those rules in a logical manner, clearly indexed and with provisions which apply to all of the rules (like common definitions) gathered together;
• make minor changes to the existing rules where necessary to reflect changes in law or practice or to modernise, clarify or simplify wording.

Further information

This will be available on the website in the form of:

• an explanatory note setting out the methodology, terminology and principles applied in the draft and the feedback sought;
• an audit trail master table - this shows the new location of each of the existing sets of rules included in the project, summarises any changes of any significance and identifies the "audit trail" document for each existing set;
• individual "audit trail" documents showing all changes proposed to the existing rules as part of the consolidation process.

Next steps

Once the consultation has closed, all responses will be considered, any necessary changes made and the Society hopes to present the consolidated rules for approval at an SGM in May 2011. If approved, the rules will require the formal approval of the Lord President and certain others but it is anticipated that they will "go live" in the late summer/autumn of 2011. Once in their final form, the rules will be available on the Society's website in a fully searchable and printable format, with cross references and definitions tagged and easy links to related guidance, advice and information.

Related projects

The current guidelines, guidance, advice and information provided by the Society are also being reviewed, updated and consolidated. The plan is to launch the new consolidated guidance simultaneously with the consolidated rules. More information will be provided on that project as it progresses.