Real Estate agents, business agents and settlement agents trust accounts
The requirements for an audit of the trust accounts maintained for the purpose of dealing in property varies slightly from state to state.
All real estate agents, business agents and settlement agents (“agents”) who hold or receive money for or on behalf of others relating to a real estate, business or settlement transaction in Western Australia are required to open and maintain trust accounts. Section 70 of the Real Estate and Business Agents Act 1978 (“REBA Act”) and section 51 of the Settlement Agents Act 1981 (“SA Act”) require real estate agents who hold a current triennial certificate and persons who carry on business as a settlement agent to have their trust accounts audited according to the requirements determined by the Commissioner for Consumer Protection (“Commissioner”) and in accordance with accepted auditing practice.
Section 70(3) of the REBA Act and section 51(3) of the SA Act require auditors to deliver their audit reports to the Commissioner within three months after the end of the audit period.
In Queensland, Section 30 of the Agents Financial Administration Act 2014 (the “Act”) states that an agent must appoint an auditor within one month of opening a trust account, and advise the Office of Fair Trading (“OFT”) within one month of the appointment.
An auditor must be appointed to audit the trust account from that point on. Section 34 of the Act requires an agent’s trust accounts to be audited for each audit period during which the agent carried on business as an agent and operated a trust account.
Section 34 of the Act requires an agent’s trust accounts to be audited for each audit period during which the agent carried on business as an agent and operated a trust account.
Section 35 of the Act requires that the audit report to be submitted to the OFT within 4 months after the end of the audit period, unless it is the last year of business where it must be lodged with the OFT within 2 months after the agent stops carrying on a business. If an agent does not lodge an audit report or statutory declaration:
- The agent can be fined or convicted of an offence; and
- The OFT can suspend or seek to cancel the licence.
During a trust account audit, we request your monthly trust bank account reconciliation, your trial balances and bank statements to verify reconciliations were correctly performed and that reconciling items are valid and do not remain unresolved for long periods of time. We also verify that none of the trust ledgers or trust bank accounts went into debit and any other compliance breaches that may have occurred during the period and that your licences remained valid throughout the audit period.
We also select a sample of transactions from deposits, payments and journals to verify to supporting documentation, authorities to act and standard documentation like statements to clients, offer and acceptances and to and from the bank.
We provide you with the trust account declarations to sign in front of a witness, add our audit report and management letter (after liaison with you) and send it to the Department of Commerce. We also send a copy to you for your records.
Depending on the size of the audit and the number of transactions, the audit can be performed either at your place of business or our offices via email or courier. All these factors will impact on the audit fee quote which is based on the number of hours likely to be spent by various levels of staff.
We are registered as auditors under Part 9.2 of the Corporations Act 2001 of the Commonwealth as required by both the REBA and SA Acts, therefore are licenced to perform your trust account audits.
We can assist you in change of auditor request forms to ensure the process goes smoothly.
AMW act professionally and courteously each time with a lot of notice so we can prepare all that is needed… highly recommend.
AMW are not only professional but very personable too. … Once this company is your auditor you will have no reason to change auditors again.