The creation of a compliance function to maintain sound risk management and internal control in the operations of a trust account legal practice is apposite. Rule 54.14.7.1 of the Legal Practice Council Rules made under the authority of ss 95(1), 95(3) and 109(2) of the LPA, requires the legal practitioner to implement and design internal controls to provide reasonable assurance of reliable financial reporting and to ensure that they operate effectively, and are monitored regularly throughout the reporting period.
The monitoring of the implementation and design of internal controls is the responsibility of the legal practitioner. The internal control systems must be ingrained into the DNA of the firm/practice and these must be followed in everyday management or actual operations. The duties in respect of compliance ultimately lie with the legal practitioner.
Each practice should design, develop, implement and maintain a compliance framework that will be appropriate to the practice. The legal practitioner is responsible for supervising the practice concerning the design and efficacy of the internal risk management and control systems, risks inherent in the practice’s activities and compliance with laws, regulations and internal rules from the compliance management plan perspective. The control environment is the tone of the organisation and is the foundation for all other controls.
A good governance system will ensure that comprehensive risk management occurs as a normal course of events. The implementation of the principles of good governance needs to be encouraged and its external enforcement mechanism strengthened.
More in-depth discussion @
https://www.derebus.org.za/wp-content/uploads/2021/09/DR_Journal_September_2021.pdf
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