The Compliance Conundrum Quiz is a compliance quiz consisting of 50 randomly generated questions that are populated automatically, each day. There is a time limit of 1 hour and the quiz will automatically finalise and submit when the time runs out.
#1. What is the definition of ‘costs’ within the SRA Glossary?
#2. If the NCA refuse to give us a DAML on day five of the notice period, we enter into what is known as the moratorium period which is up to:
#3. Under the SRA Accounts Rules, are you required to obtain the client’s approval prior to transferring costs to the business account?
#4. What is the definition of disbursement within the SRA Glossary?
#5. A court fee has been paid from the business account, what VAT rate do you analyse the payment to when posting to the accounts system?
#6. You receive an invoice from an overseas supplier for £100 (without VAT) but you would have been charged £20.00 VAT if you’d used a UK supplier.
What figures would you need to put on your VAT return and in what boxes would you put them?
#7. Your firm is instructed by the landlord of a new development of commercial properties to prepare the lease agreements. You’re also instructed to receive, and hold in client account, the rental deposits that are paid by the tenants. These will be held until the lease comes to an end and any conditions, e.g. dilapidations, are met.
Is this a breach of the SRA Accounts Rules?
#8. Your firm prepare a lot of wills and fixed fee interviews as one-off transactions for clients. However, instead of opening an individual client ledger for each client, you have a general ledger on which you record the details of each client and the costs received.
Is this a breach of the SRA Accounts Rules?
#9. You’re acting for a client whose place of belonging is Jersey. You have instructed a UK barrister on behalf of the client. The barrister has issued you with a VAT invoice addressed to your firm and has charged you £2,000 plus VAT.
When billed to the client, you would treat the cost as:
#10. Under the Proceeds of Crime Act and the Money Laundering Regulations all regulated businesses must have a nominated officer or MLRO. What do the initials MLRO stand for
#11. You’re acting for a client in respect of a compromise agreement. The employer has agreed to pay your client’s costs and has asked if you would address your invoice to them?
What would you issue the payer?
#12. In a non-contentious case, the VAT tax point will be the date of the invoice, provided the invoice is issued within how long after the work is completed?
#13. In law firms that are transactional, the MLRO will submit suspicious activity reports often asking for a Defence Against Money Laundering (DAML) or consent to proceed. When they have been received the NCA have how many days to respond (notice period):
#14. I no longer need to consider time frames when transferring costs (fees and disbursements) to the business account?
#15. You must obtain physical copies of client account bank statements.
#16. You operate various client’s own accounts. SRA Accounts Rule 10 appears to require you to carry out a bank reconciliation for these accounts.
Are you required to prepare a three way bank reconciliation every 5 weeks if you can’t obtain bank statements from the bank or building society?
#17. If a business expects to spend more than it earns, it becomes known as what?
#18. What is the Tax Point date of a Credit Note?
#19. The cost of any time taken in trying to return a residual balance to the client can be deducted from the balance held?
#20. Your firm is acting for a client. The case is a criminal matter. The fee earner instructs a specialist to produce video copies of CCTV footage where the action is slowed down, hard copies of individual frames and enhanced/enlarged sections of images are produced. The cost of this service is being passed on to the client.
When billed, the cost is a:
#21. If you receive notification of an SRA Forensic Investigation, does the SRA provide a reason?
#22. Your firm is acting for a client in respect of a purchase of a residential property. The lawyer applies for an OS1 search direct from the Land Registry. The search result reveals that there has been alterations made to the register since the date the Official Copies were produced by way of a restriction. The lawyer advises the client on the results of the search.
When billed to the client, you would treat the cost as:
#23. Most law firms now use electronic ID and verification tools as part of their client onboarding. These tools are there to help you:
#24. On the day of an SRA AML visit the SRA will speak to selected fee earners. Usually this will be:
#25. Section 18 of the Legal Sector Affinity Group (LSAG) guidance covers red flags and warning signs for us to look out for regarding AML and CTF. If we have red flags and warning signs come up we are not allowed to take on the client:
#26. The best leaders have one type of leadership style and stick to it consistently
#27. Which one of the following statements is true?
#28. The COFA must report all breaches to the SRA.
#29. How should you decide the level of source of funds enquiry needed?
#30. A bill of costs must be signed by a partner/director or member?
#31. Firms are allowed to pay residual balances to a charity of the firm’s choice provided the firm complies with the SRA’s prescribed circumstances.
They do not need to make an application to the SRA if the balance is:
#32. When a client needs to make a complaint about your firm, they must follow the firm’s complaints procedures. If they are not happy with the way the complaint has been dealt with, they will then take it further by going to the Legal Ombudsman (LeO). They must make their complaint to LeO within which time scale after the firm’s final response to them?
#33. What is the difference between the Profit and Loss Account and the Balance Sheet?
#34. The bank has charged you for sending funds electronically. It is agreed with the client that the cost charged by the bank will be passed on to the client. You are NOT charging the client an administration fee for sending the payment.
How should this cost be shown on the bill to the client?
#35. The ‘Balance Sheet Test’ is when?
#36. A ‘Disbursement for VAT Purposes’ is:
#37. The interest received on general client account is:
#38. True or false: all incorporated entities must publish full accounts at Companies House
#39. Your practice is a traditional partnership. The partners of the practice administer oaths.
Are the fees received for administering the oaths subject to output VAT?
#40. What should you request to properly verify a client’s source of funds?
#41. What is the name given to the cash flow method where the cash flow forecast predicts when cash will be coming in and out of the business at specific points in time i.e. the exact day or week in a month?
#42. The COFA is solely responsible for monitoring and controlling financial stability.
#43. Money received from the Legal Aid Agency on account of disbursements that are not yet incurred or paid is?
#44. A client bank account must contain the word ‘Client’ within the account name?
#45. When dealing with residual balances, instead of recording the payment to the charity from the client’s ledger, your firm moves the residual balance to a ledger in the name of the charity. The payment is then recorded and made from that ledger every six months.
Is this a breach of the SRA Accounts Rules?
#46. Which of the following are NOT taxable VAT rates? *
Select all that apply:
