Solicitors Trust Account Audit.
Things to know:
What is solicitors trust account audit?
Lawyers and Barristers who maintain trust accounts to handle trust money of the clients need an annual audit for their trust account. So, In a nutshell Solicitors’ trust account audit means the external examiner is forming an opinion on whether the law practice during the period of the examination has, complied with the requirements of the relevant legislation, regulations and any legal profession rules relating to how law practice handles trust money. This involves acquiring evidence to ascertain whether:
- accounting and other records relating to trust monies have been properly kept; and
- there is no loss or deficiency of trust monies or failure to pay or account for trust monies; and
- there has been no failure to comply with a provision of the Act or Regulations.
The external examiner and / or auditor must sign off an audit report and /or a certificate, in a form approved by the relevant state or territory, certifying the statement of trust money prepared by the law practice and submit this to the relevant authority by the specified deadline.
Some Important Advises:
Meet all deadlines:
Meet all the deadlines prescribed in Legal Profession Uniform General Rules 2015. And,
Keep all documents safe:
Keep all the related documents safe and easily available. And maintain backup data. And,
Follow the Rules:
Follow the rules prescribed in the law for each and every single trust account transactions. And,
Inform all issues to authority:
Inform the authority if you are confused about any transaction of the trust account.
Annual audit requirements:
Unlike the income tax year, Solicitor Trust Accounts are required to report to the year ended 31 March. Solicitors must ensure that trust accounts are audited within the prescribed time frame each year. The cost of the audit is to be borne by the solicitor, but is to be paid from the solicitor’s general account and not from the trust account. The auditor is to be allowed access to accounting records of the trust account, and also to the records and files of the solicitor’s practice. So, this access is essential in ensuring that all transactions involving trust account money have been recorded correctly.
Because, the timing of the audit is determined by the provisions of the Act in each state and territory, So it is important to meet the deadlines properly. Some legislation requires more than one audit visit each trust year. For example, Victoria requires an unscheduled visit during the audit year in addition to the year end visit.
Important dates and regulations:
New South Wales
Period of statements:
From 1 April 2018 to 31 March 2019
Report Lodgment Due Date:
31 May 2019.
Related Regulations for NSW Law Practices:
Legal Profession Uniform Law (NSW) and
Victoria
Period of statements:
From 1 April 2018 to 31 March 2019
Report Lodgment Due Date:
31 May 2019.
Related Regulations for VIC Law Practices:
Legal Profession Uniform General Rules 2015
Legal Profession Uniform Law 2014 (Victoria)
Australian Capital Territory
Period of statements:
From 1 April 2018 to 31 March 2019
Report Lodgment Due Date:
31 May 2019.
Related Regulations for ACT Law Practices:
The Legal Profession Act 2006, and
The Legal Professional Regulations 2007.
Queensland
Period of statements:
From 1 April 2018 to 31 March 2019
Report Lodgment Due Date:
31 May 2019.
Related Regulations for QLD Law Practices:
The Legal Profession Act 2007, and
The Legal Professional Regulations 2007.
South Australia
Period of statements:
From 1 April 2018 to 31 March 2019
Report Lodgment Due Date:
31 May 2019.
Related Regulations for SA Law Practices:
The Legal Practitioners’ Act 1981, and
The Legal Professional Regulations.
Western Australia
Period of statements:
From 1 April 2018 to 31 March 2019
Report Lodgment Due Date:
31 May 2019.
Related Regulations for WA Law Practices:
Legal Profession Rules 2009, and
Legal Profession Regulations 2009 .
Northern Territory:
Period of statements: From 1 April 2018 to 31 March 2019
Report Lodgment Due Date: 31 May 2019.
Related Regulations for NT Law Practices:
The Legal Profession Act 2006, and
The Legal Professional Regulations.
Tasmania
Period of statements: From 1 April 2018 to 31 March 2019
Report Lodgment Due Date: 31 May 2019.
Related Regulations for TAS Law Practices:
The Legal Professional Act 2007, and
The Legal Profession (Prescribed Authorities) Regulations 2008
Engagement letter for trust account audit
The engagement letter clearly delineates the responsibilities of the solicitor, including the requirements to maintain an adequate system of internal control, to maintain proper accounting records, and to ensure that the conditions of having a trust account are complied with throughout the year. And the letter also outlines general audit procedures to be performed, including a review of internal controls over the operation of the trust account and relevant accounting information. And other information includes such as fees and payment requirements. So, for your convenient we have attached relevant engagement letter for different states:
About us: External Examiner
External Examiner operates under A1 Financial Services Group which is part of Accountants Point Pty Ltd. Accountants Point is the brand under which professionals collaborate across offices in Australia to provide audit and assurance, financial advisory, tax and technology services. And Accountants point provides services in all areas of Audit, Business and Tax Advisory, SMSF management and Succession Planning.
So, please feel free to contact us for all your Audit and Financial services needs.
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