Do you want you Conveyancer Trust Account Audit to be done?
Conveyancer Trust Account Audit: Are you currently managing a trust account involving trust money, i.e. money your clients have entrusted you with in relation to your conveyancing work?
This could be:
- Money you received as your advanced fees for carrying out your work
- Controlled money – where you are holding or accepting money along with a written statement directing you to deposit it into another account that you have exclusive control over
- Transit money – Money that you have received in cash and have been made responsible for delivering to a third party
If so, then are you aware that as a conveyancer managing a trust account, you have special obligations to maintain bank accounts and detailed recording systems for handling your clients’ money, as well as an obligation to arrange for regular auditing arrangements by the due date stated in the state legislation. Every state has a different deadline – for instance, in Victoria and New South Wales, the audit has to be completed within 3 months of the financial year ending June 30th and no later than September 30th. Maintaining detailed records should involve keeping records of all trust cash, EFT payment receipts and deposit records. This also involves maintaining all receipts for transit money. You will also be required to keep a register of controlled money if there is any. The auditors would require all the detailed records that you have maintained to conduct the audit.
The purpose of the audit would be for auditors to establish that you have complied with your legislative duties. The process of the audit would involve the audit team examining all of the financial and accounting records and other relative documents, using judgment to derive at assumption or estimates, testing internal controls and obtaining written confirmation e.g. asking the third party to confirm the amount received. Auditors will also be confirming compliance with the relevant legislations.
If you only receive transit money from clients, then you are exempt from annual audit engagements. Annual audits must be conducted by approved auditors. An accountant would be considered an approved auditor only if they are a practicing public accountant and a member of at least one of the professional bodies; CPA Australia, the Institute of Public Accountants, or the Institute of Chartered Accountants in Australia. You must lodge a copy of the audit report within 10 days of receiving it.
Keep in mind, if the auditors are unable to properly audit or if you receive a qualified audit i.e. if the auditor finds anything strange in your trust account, if you failed to pay any trust money entrusted to you by your client, or if you failed to comply with any regulations, then the auditor will be required to report immediately to the director. It is very important for you to not miss out on the audit deadline, as it can lead to hefty penalties – you can be sentenced, fined or even lose your conveyancing license.