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LPC: Advisory Notice – Changes to refund applications
- 28 January 2025
- Regulatory Compliance and Legislation
- South African Accounting Academy
Summary:
The Legal Practice Council (LPC) has issued an Advisory Notice on the Changes to refund applications for bank charges and audit fees on trust accounts.
Article:
On 19 October 2023, the Board of the Legal Practitioners’ Fidelity Fund (LPFF) issued a directive that requires registered auditors to conduct an agreed-upon procedures engagement on the completed application for refund of bank charges and audit fees form.
In terms of the Directive issued on 19 October 2023 auditors were required to utilise the Agreed- Upon Procedures Report (AUP Report) issued by the South African Institute of Chartered Accountants (SAICA), which is effective for agreed-upon procedures engagements on the Application for a Refund for Application of Bank Charges and Audit Fees beginning on or after 1 November 2023.
Notwithstanding the directive issued by the LPFF they have accepted application for refunds where the auditor has signed the “certificate by auditor” section of the refund form and has not provided an AUP report.
The LPFF has agreed to accept such refund application which do not contain an AUP report from the auditor until 28 February 2025. Thereafter the LPFF will not process any applications for refunds which are not accompanied by an AUP report prepared and signed by a registered auditor.
It should be noted that the AUP is not an audit/assurance engagement which relates to a legal practitioner obtaining a Fidelity Fund certificate. The cost of the engagement is thus not recoverable from the LPFF in terms of S57(2)(c). Legal practitioners are thus urged to discuss the matter with their auditor so that they consider the potential cost implications as well as any additional time required by the auditor to complete the AUP engagement.
Click here to download the 2-page Advisory Notice:
https://lpc.org.za/wp-content/uploads/2025/01/Advisory-Notice-Changes-to-refund-applications.pdf
Relevance to Auditors, Independent Reviewers & Accountants:
- The Legal Practitioners Act is yet another piece of legislation that your clients must comply with, and which you must assess compliance with. If they don’t comply with the relevant laws and regulations, you have certain reporting obligations in terms of NOCLAR (NOn-Compliance with Laws And Regulations) – this could include reporting to management, qualifying your audit opinion, reporting a Reportable Irregularity, etc.
- As an auditor and independent reviewer, you need to consider and assess compliance with the LPA and Guidance documents issued by the LPC and LPFF.
- As an accountant, you may need to advise your clients who are legal practitioners on compliance with the LPA and adherence to the latest guidelines issued by the LPC and LPFF.
- As an auditor/assurance practitioner, you should ensure that you provide the correct revised AUP Report.
Relevance to Your Clients:
- A legal practitioner has a duty to comply with the Legal Practitioners Act.
- Your clients who are legal practitioners, must not only comply with the LPA, but they also have to adhere to the latest guidance documents issued by the LPC and LPFF.