Accountant's report exemption: both the average and maximum balance limits must be met (rule 12.2)

Rule 12.1 of the SRA Accounts Rules requires a firm that has held or received client money during an accounting period to obtain an accountant's report for that period within six months of its end. The report must be delivered to the SRA within that time only if it is qualified to show a failure to comply such that client money is, has been or is likely to be placed at risk. Rule 12.2(b) exempts a firm only if the statement balance of client money does not exceed both an average of £10,000 and a maximum of £250,000. SRA guidance explains that the average and maximum are taken from the reconciliation balances over the period. Calder Osei's average (£8,400) is within the limit, but its maximum reconciliation balance (£265,000) exceeds £250,000, so the exemption is not available. The firm must obtain a report by 31 October 2026 and deliver it only if it is qualified.

Why A is wrong: The exemption requires both the average and the maximum condition to be met; the maximum is exceeded.

Why B is wrong: Only a qualified report (showing client money at risk) must be delivered to the SRA, unless the SRA requires otherwise.

Why C is wrong: The report must be obtained within six months, not twelve, of the end of the accounting period.

Why E is wrong: Rule 12.2 sets an absolute maximum; exceeding it at any reconciliation in the period removes the exemption, however briefly.