Legal · 🇬🇧 United Kingdom
Client account reconciliation that had drifted
A small practice holding client money found its client account reconciliation had not been completed properly in months.
UK law firm, client account holding third-party money. Client identity withheld — we publish names only with written permission, so this engagement is described by its shape rather than by who it was.
Monthly
Client account reconciliation restored
0
Unreconciled balances at close
Documented
Breach position
The situation
- The firm held client money and was required to reconcile the client account regularly and keep the records to a defined standard.
- The person who ran it had left, and the reconciliation had been performed superficially since.
What we found
- Residual balances on completed matters that should have been returned or accounted for.
- Office and client money not consistently separated on a small number of transactions.
- The reconciliation was being signed off without the underlying differences being resolved.
What we did
- Rebuilt the client account reconciliation from the last clean point, matter by matter.
- Identified and cleared residual balances on completed matters.
- Documented the position, including where rules had not been met, for the firm's own compliance reporting.
- Introduced a monthly reconciliation with a defined reviewer who is not the preparer.
The outcome
- The client account reconciles monthly with no unexplained differences, and the firm has a documented record of what was wrong and when it was fixed.
- Separating preparation from review was the control that mattered most.
What we'd flag
Some historic breaches had to be reported. Documenting them properly was the correct action, not the comfortable one.
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