Motor Vehicle Dealers Consignment Trust Accounts
Section 32I of the Motor Vehicle Dealers Act 1973 requires that person who carries on the business of a dealer for the whole or part of a year must ensure that each trust account that is held by the dealer for that year, or part of a year, as the case may be, is audited by a registered company auditor.
The auditor must then within 3 months after the end of each year, deliver to the Commissioner a report of the result of the audit, verified by a statutory declaration of the auditor, in an approved form.
An auditor’s report must contain a statement as to the following matters —
(a) whether the trust account has, in the opinion of the auditor, been kept regularly and properly written up;
(b) whether the trust account has been ready for examination at the periods appointed by the auditor;
(c) whether the dealer has complied with the auditor’s requirements;
(d) whether the trust account is, or has been during the period of the audit, overdrawn;
(e) whether in the opinion of the auditor the trust account is, and has been during the period of the audit, in order or otherwise;
(f) any matter or thing in relation to the trust account that should in the opinion of the auditor be communicated to the Commissioner.
To start the consignment trust account audit, we normally request a copy of your motor vehicle dealers licence, your consignment trust ledger, your accounting records and monthly bank reconciliations as well as your trust bank account statements.
From here we select a sample of transactions to test both from the ledger and from the bank account, for which we request supporting documentation such as the consignment agreement, the purchase agreement, invoices for expenses paid from the consignment trust account and other documentation depending on the transactions selected for testing.
After the completion of the audit, we require the licensee to sign the Declaration By Dealer which is submitted together with our audit report to the Department of Commerce.
Depending on the size of the audit and the number of transactions, the audit can be performed either at you 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 spent by various levels of staff.
We can assist you in change of auditor request forms to ensure the process goes smoothly.