Annual trust account external examination preparation
The external examination is an annual audit of the trust account. This checklist walks through the preparation steps.
This is a 12-step preparation checklist for the annual external examination of a NSW trust account. It covers records, reconciliations, compliance and lodgement.
The checklist
Engage an external examiner
Engage a person approved to conduct external examinations under the Uniform Law.
Set the examination date
The examination must be completed and a report lodged by 31 May each year for the year ending 31 March.
Assemble bank statements
Collect all monthly bank statements for the examination period.
Assemble monthly reconciliations
All 12 monthly reconciliations, signed by the principal within 15 working days of month-end.
Assemble trust receipts and deposit records
Duplicate receipts, deposit slips and banking records for the entire period.
Assemble trust payment records
Cheque butts, EFT records, authority records and supporting invoices.
Assemble client ledgers
Full set of client matter ledgers with supporting documents.
Check controlled money accounts
All controlled money accounts must be identified and reconciled.
Check written authorities
Every trust payment must have a written authority from the client.
Prepare explanation of anomalies
Prepare a written note on any unusual transactions, deficits or late sign-offs.
Receive and review the report
Review the examiner's report before lodgement and address any qualified opinion.
Lodge with the Law Society
Lodge the signed report with the Law Society of NSW by the due date.
When this checklist applies
Use this checklist each April and May in the lead-up to the 31 May lodgement deadline.
Common pitfalls
- Engaging an unapproved external examiner
- Missing monthly reconciliations
- Missing written authorities for trust payments
- Late lodgement
- Unresolved anomalies carried into the audit
Run this checklist on a real matter
Quillio generates audit preparation packs and anomaly notes in current NSW format. See /practice-areas/commercial-lawyers.
This checklist is a general guide. Always follow the current Uniform Law and Rules.
Use this checklist on your matter.
Quillio can run this checklist on a specific NSW conveyancing matter — confirm each item, calculate adjustments, and generate the supporting documents. The free trial requires no credit card.
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