Melbourne Trust Account Audit Specialists

BHT Partners Audit ensures compliance with trust account requirements for approved licensees. Consumer law requires certain professional enterprises to open a trust account for the purpose of depositing money paid in advance by clients.

For example, lawyers (or approved law clerks) and estate agents are required to deposit certain types of funds received from clients into a trust account. The licensee seeking to deposit funds into a trust account must have approval to do so, which may be sought from Consumer Affairs Victoria.

Trust Account Obligations for Lawyers, Agents and Licensees

Estate agents are required to deposit certain payments, for example, rental bond payments, into an approved trust account. Legal professionals are required to deposit funds received in advance for certain services into a trust account, from which the funds may be drawn into a general business account later.

Trust accounts are regulated by different bodies depending on the type of account. In Victoria, law practice trust accounts are regulated by the Victorian Legal Services Board. Estate agent and conveyancer trust accounts are regulated by Consumer Affairs Victoria.

What is Client Money?

For the purposes of compliance with trust account regulations, client money refers to money entering a public/licensed practice or firm to which the entity and its personnel have no present entitlement. This means that, legally, the funds received are still the property of the client. Therefore, such funds are referred to as ‘client money’ and must be deposited in a compliant trust account.

Client money is to be handled separately from funds held by the business and/or its personnel. This creates a requirement for the establishment of a designated trust account, where client money may be deposited and held in trust until the licensee becomes entitled to receive it.

Depending on the type and scale of the licensee’s operations, they may open separate trust accounts for individual clients or establish a pooled trust account where all client monies are deposited. In either case, the trust account must be appropriately designated and named in order to achieve compliance.

Who Can Conduct a Trust Account Audit?

Trust account compliance audits may be performed by an individual or firm accredited with the CA ANZ, IPA, or CPA certificate of public practice. Company auditors registered with ASIC may also perform these audits if they hold the appropriate accreditation.

BHT Partners Audit is accredited by CPA Australia. Our auditors are also registered with ASIC, providing our clients with certainty regarding our professional integrity and reliability.

Our Audit Process for Trust Account Compliance

To comply with regulations governing the handling of client money, trust accounts used for this purpose must undergo annual auditing by an approved auditor. Strict timeframes affect the annual auditing process. Trust account holders are required to meet the following requirements during the annual auditing process:

  • Providing the appointed trust account auditor with the documentation and information, such as financial statements and reports, that they reasonably require in conducting the audit.
  • Prepare a certified statement that details the client’s money held in the trust account as of the last day of the audit period. This includes any deposit receipts or securities you possess at that time representing money drawn from the account.
  • Keep a copy of the signed trust account audit report for a period of seven years after you receive it from the appointed auditor. You must be able to produce your copy of the auditor’s report on demand if required to do so.

What We Report To the Regulator

As appointed trust account auditors, BHT Partners Audit is required to report any of the following to the regulator as part of the trust account audit process:

  • Any breach of laws or dishonest conduct by the trust account holder
  • Losses or deficiencies of client money held in trust. As well as failures to account for pay for such losses or deficiencies.
  • Failures to comply with the relevant legislation.
  • If the trust account is not suitably maintained or administered so that it cannot therefore be audited according to the prescribed standards.

Before we conduct your trust account audit, we will create an audit plan. Once complete, BHT Partners Audit will provide you with a signed copy of the auditor’s report.

If you’re in need of an auditor, please get in touch with us on (03) 9431 1827.