Most practising solicitors maintain a solicitor trust account to manage trust money on behalf of their clients.

In accordance with current state legislation, you must have your trust account externally examined at least once a year.

RSM Australia has a dedicated team of approved external examiners ready to help with your annual external examination. We are experienced in conducting trust account audits in accordance with state legislation while adhering to all statutory deadlines. Our team also stays current with legislative changes, allowing us to understand how they might affect your firm.

Now is the perfect time to plan for the external examination of your trust account. Contact us to get started.

Why choose RSM to conduct your solicitor trust account audit?

We have noticed a concerning trend among our clients: many have not received recommendations for improvements during their annual examinations or only hear from their examiners once a year. This could indicate an increased compliance risk for your firm.

Our audit and assurance team has a firm-wide policy of looking beyond compliance to add value to our clients. That is why, in addition to providing a compliance-based external examiner report, we will evaluate your trust accounting systems and current practices.

Our goal is to provide actionable recommendations that can enhance your business operations. 

Years of experience in auditing solicitor trust accounts

With extensive experience auditing solicitor trust accounts in every State and Territory across Australia, our specialised team understands the unique challenges of the legal profession.

As trusted partners in your compliance journey, we pride ourselves on our deep knowledge of the legal landscape and legal requirements of trust account regulations and auditing processes.

Our expertise spans a range of leading trust accounting software, including LEAP, FilePro, Lexus, OpenPractice, Law Master, 3E - Elite, and Smokeball.

By staying updated on the latest regulations, including guidance from CPA Australia, we provide a smooth experience for your firm. 

This extensive background enables us to conduct thorough and efficient audits, ensuring that all statutory requirements are met while maintaining the highest standards of service. 

What to expect when working with an RSM external examiner

Partnering with RSM means you get a team you can trust, committed to delivering timely examiner reports for your peace of mind. After our initial planning meeting with management, we provide a schedule of audit document requests required for the solicitor trust account audit and lock in audit dates.

We will streamline your trust accounting compliance with our proven audit methodology. Our hybrid working model combines on-site and remote visits, minimising disruption while ensuring cost-effective external examinations that meet your needs. Where information is required electronically, we use our secure iManage Share platform, which helps to facilitate the efficient transfer of information, including the ability to upload large files at high speeds. 

At RSM, we believe in continuous education and improvement, which is why we tailor our insights specifically to your unique challenges and goals. Our comprehensive annual management letters are filled with actionable recommendations to enhance your trust accounting systems and processes.

Leverage our expertise to navigate trust account management with ease. 

Preparing for a solicitor trust account audit

Preparing for a solicitor trust account audit involves several key steps to ensure compliance and smooth auditing. Here are some essential tips:

  1. Maintain accurate records: Ensure all trust account records are up-to-date and accurately reflect all transactions.
  2. Internal reviews: Conduct regular internal audits to identify and rectify any discrepancies before the external audit. This helps in maintaining ongoing compliance.
  3. Reconcile accounts: Regularly reconcile trust accounts to ensure that the balances match the records. This includes reconciling client ledgers with bank statements in the required timeframes.
  4. Organise documentation: Keep all trust documents well-organised and easily accessible. This includes transaction records, receipts, payments, and any correspondence related to trust account transactions.
  5. Compliance checklists: Consider using compliance checklists to ensure all regulatory requirements are met each month.
  6. Staff training: Ensure that all staff handling trust accounts are well-trained in compliance requirements and understand the importance of accurate record-keeping.
  7. Use approved software: Implement robust accounting software that complies with legal standards and provides real-time compliance monitoring.
  8. Secure records: With more firms moving to cloud-based systems ensure that all documentation related to trust accounts is appropriately protected and ensure they are kept safe and secure for the relevant periods of time.

   Frequently asked questions:   

A solicitor trust account audit is an annual review by an external examiner to ensure that a law practice’s trust accounts comply with relevant legislation and regulations. Solicitors maintain trust accounts to handle money on behalf of their clients, and these accounts must be accurately documented and managed.
The audit involves checking that:

  • Trust accounting records are properly kept.
  • There is no loss or deficiency of trust funds.
  • All legal rules and regulations regarding the handling of trust money are followed.

The relevant state-based legislation mandates solicitor trust account audits. Each state also has a regulatory body that ensures that solicitors comply with the applicable legislation and maintain the integrity of their trust accounts through regular audits.

Solicitor trust account audits are mandated by the relevant state-based legislation. While individual firms may differ, the usual year ends and audit due dates are outlined below.

Solicitor trust account audits must be performed by an external examiner who meets specific qualifications and is approved by the relevant regulatory body in each state or territory.

RSM has a number of approved external examiners across the relevant states and territories. 

For a solicitor trust account audit, your examiner can request any documentation under the relevant legislation. Standard documents that your examiner may ask for include:

  • Statement of trust money
  • Trust account bank statements
  • Trust account bank reconciliation
  • Statutory deposit account records (if applicable)
  • Controlled money receipts and payment records
  • Controlled money bank statements
  • Controlled money registers
  • Cash receipts and cash payment reports
  • Trust ledgers
  • Trust receipts
  • Duplicate deposit slips
  • Trust payments, including by both cheque and electronic funds transfers
  • Investment money registers and accounts
  • Trust transfer journals reports
  • Trust journals
  • Transit money registers
  • Dormant balances listings with reasoning for aged matters
  • Register of powers and estates
  • Register of trust money subject to a specific power
  • Register of financial interests
  • Register of safe custody documents
  • Register of open files
  • Deficiencies reported to regulatory bodies
  • Any other relevant documents that support the transactions in the trust account.

A solicitor trust account audit is a compliance audit that focuses specifically on the compliance of the trust records, whereas a financial statement audit examines an organisation’s overall financial health and practices of an organisation.

After our initial planning meeting with management, we provide a schedule of audit document requests required for the solicitor trust account audit and lock in audit dates.  

Our solicitor trust account audits are often completed with a hybrid working arrangement, combining on-site and remote visits to minimise disruption to our clients. Where information is required electronically, we utilise our secure iManage Share platform, which helps to facilitate the efficient transfer of information, including the ability to upload large files at high speeds. 

 

  MEET OUR EXPERT  

Tutu Phong

Tutu Phong is a Partner and the National Head of Audit & Assurance at RSM Australia, based in Perth. 

Tutu provides comprehensive Audit and Assurance Services in Perth and throughout Western Australia tailored to meet the specific needs of each individual business. 

Tutu commonly helps his clients apply specific accounting or audit standards to their circumstances, not just for today but considering ramifications for the future as their circumstances change.

Get in touch

We are here to help with the solicitor trust account audit process and can provide you with a quote which is fit-for-purpose and based on the size and complexity of your firm. We will manage a seamless transition from your previous external examiner. 

By taking proactive steps to manage risks today, we can safeguard your practice and its operations for the future.

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