If you receive or hold a money in a trust account you are required to have your trust accounts audited by September 30.

The following people must have their trust accounts audited if they received or held trust money during the financial year ending 30 June 2017:

  • a licensee
  • a former licensee, or
  • a personal representative of a licensee.

Who is required to submit an audit?

The following people must submit an audit of their trust account to the Director-General if they received or held trust money during the financial year ending 30 June 2017, and the auditor’s report was qualified by the auditor:

  • a licensee
  • a former licensee, or
  • a personal representative of a licensee.

When must the audit be lodged?

The qualified audit must be lodged within 3 months after the end of the audit period. The qualified audit for most agents must be lodged with the Director-General no later than 30 September 2017.

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

In most cases, it is the licensed corporation that receives and is responsible for trust funds. Therefore, in most cases, a qualified trust account audit must be lodged by the licensed corporation. However, if an individual licensee receives and is responsible for trust money, then a qualified trust account audit must be lodged by the individual licensee.

Note that the auditor is now also required to lodge a copy of the qualified audit with Fair Trading within 14 days after providing the report to the licensee.

What is a ‘qualified’ audit report?

Qualified audit report is now defined in the Act as a discovery by the auditor of a breach of the Act or Regulations, any discrepancy relating to the trust account or a failure to keep records in a manner that enables them to be properly audited.

Who can conduct the audit?

Auditors must be registered with the Australian Securities and Investments Commission (ASIC) or be qualified under s.115 (1) (b) of the Act. The list of persons who are qualified to conduct audits has now been widened. Authorised audit companies, members of a Professional Accounting Body as defined under the ASIC Regulation 2001 (i.e. CPA Australia, Institute of Chartered Accountants in Australia and National Institute of Accountants) holding a Public Practising Certificate with one or more of those bodies.

Wentworth Williams are specialists in Auditing, talk to us today.