NSW TRUST ACCOUNT AUDITING REQUIREMENTS

The following people must have their trust accounts audited if they received or held trust money during the financial year ending 30 June 2019:

  • a licensee (corporation or individual);
  • a former licensee (corporation or individual); or
  • a personal representative of a licensee.

In most cases, it is the licensed corporation that receives and is responsible for trust funds. Therefore, a trust account audit must be effectuated by the licensed corporation.

However, if an individual licensee receives and is responsible for trust money, then a trust account audit must be effectuated by the individual licensee.

Who is required to submit an audit?

All trust account audits must now be completed and submitted online by the auditor through the Auditor’s Report Online portal. Licensees will now receive emails from Auditors Report Online as their audit progresses through the various stages.

When must the audit be submitted?

All audits must be submitted to the Secretary within three months after the end of the audit period and no later than 30 September 2019.

If a trust account audit is not submitted by the due date, licensees could be disqualified from holding a licence and possibly prevented from renewing a licence.

Who can conduct the audit?

Auditors must be registered with the Australian Securities and Investments Commission (ASIC) or be qualified under section 115 of the Property Stock and Business Agents Act 2002.

Registered audit companies, authorised company auditors and members of a Professional Accounting Body holding a Public Practising Certificate or Certificate of Public Practice can conduct the audit.

Professional Accounting Body is defined under the Australian Securities and Investments Commission Act 2001 e.g. CPA Australia, the Institute of Chartered Accountants of Australia and the National Institute of Accountants.

Unique Identifying Trust Account Numbers

Another minor change which commenced some time ago but received little exposure at the time was the introduction of a unique identifying number when opening or maintaining a general trust account.

Licensees who open a general trust account are now required to obtain from NSW Fair Trading a unique identifying number and provide it to the authorised deposit-taking institution at the time of making the application. These unique identifying numbers issued by Fair Trading to agents operating general trust accounts are to ensure that banks account for the interest in respect to all these general trust accounts.

Article Written by:  Col Myers of Small Myers Hughes

Liability limited by a scheme approved under Professional Standards Legislation
Disclaimer – This article is provided for information purposes only and should not be regarded as legal advice.

 

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