Under the Property Stock and Business Agents Act 2002, licensees’ records in relation to the handling of trust money must be audited.
Recent amendments to the Act have resulted in a new framework for how property professionals handle their trust accounting audit responsibilities. Below is the framework for all trust accounting audit responsibilities.
Who is required to submit an audit?
All licensees, former licensees or personal representatives of a licensee 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 2014.
When must the audit be lodged?
The qualified audit must be lodged within three months after the end of the audit period. The qualified audit for most agents must be lodged no later than 30 September 2014.
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.
What is a 'qualified' audit report?
The term “qualified audit report” is now defined by 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.”
While all licensees who held or received trust money during their audit year still need to have their trust accounts audited, only those audits that are qualified by the auditor are required to be lodged by the auditor and licensee with NSW Fair Trading. This process is new under the Act.
What if no trust money is held in 2013/14?
Previously, licensees were required to have their trust account audited and lodged whether the audit was qualified or not. The Act has amendment this process. Licensees who do not hold or receive trust money during the audit year will no longer be required to lodge a statutory declaration. Instead, licensees will be required to note whether or not they did so when they next re-apply for their licence.
For more information on your trust account audit requirements, go to the NSW Fair Trading website.