As a law firm in New South Wales or Victoria, it is crucial that you understand your obligations when it comes to managing your trust accounts. One of these obligations is to have your trust account audited or examined by an external examiner every year between 1 April and 31 May. In this article, we’ll take a closer look at the process of external examination, and how our specialty in performing external examination can help your firm stay compliant with the trust account regulation and legislation.

The Law Society of New South Wales requires that all law firms taking trust money maintain a trust account, which is a separate account used to hold clients’ money. This ensures that clients’ funds are kept separate from the firm’s own money, and provides a layer of protection for clients’ funds. However, with this comes the responsibility of ensuring that the trust account is managed in accordance with the Legal Profession Uniform Law (NSW) and the Legal Profession Uniform General Rules 2015.

One of the key requirements of trust account management is the annual external examination. This involves engaging an external examiner to review your trust account records and verify that your trust account is being managed in compliance with the relevant laws and regulations. The external examination process involves a detailed review of your trust account transactions, including bank statements, cheque books, receipts and payments, and other relevant documentation. Any discrepancies or errors will be noted, and the law firm will be required to take corrective action to ensure compliance.

At our firm, we specialize in performing external examinations for law firms. We have a team of experienced and qualified professionals who are well-versed in the trust account system and the requirements of external examination. Our team is committed to helping law firms achieve compliance with the trust account system, and to providing practical solutions for any issues or problems that may arise.

One of our key strengths is our knowledge of the trust account system and our ability to help law firms solve compliance issues. We understand that managing a trust account can be complex and challenging, and that mistakes can easily be made. Common non-compliance breaches that we often witness are failure to enter a receipt or payment of trust money into the trust ledger account within 5 working days, and failure to perform a month-end reconciliation within 15 working days.

To overcome these issues, we recommend implementing a system for tracking and recording trust account transactions on a daily basis or at least weekly basis. This will help ensure that all receipts and payments are promptly entered into the trust ledger account and that month-end reconciliations can be performed in a timely manner. We also recommend providing regular training and support to staff on trust account management, and establishing clear policies and procedures for managing trust accounts.

In summary, as a law firm in New South Wales or Victoria, it is important to understand your obligations when it comes to managing your trust accounts. This includes the requirement for an annual external examination, which ensures that your trust account is being managed in compliance with the relevant laws and regulations. At our firm, we specialize in performing external examinations, and we have a team of experts who can help you stay compliant and solve any compliance issues that may arise. Contact us today to learn more about our services and how we can assist your law firm.

Should you please have any question in regards to above, please feel free to contact our friendly team in Pitt Martin Tax at 0292213345 our info@pittmartingroup.com.au.

The material and contents provided in this publication are informative in nature only.  It is not intended to be advice and you should not act specifically on the basis of this information alone.  If expert assistance is required, professional advice should be obtained.