With the end of the trust accounting year fast approaching in a number of Australian states and territories now is the time to review some of the key compliance provisions. After speaking with the head of the Legal Accounting Forum, Simon Tredinnick, we’ve compiled our top tips for a smooth external trust examination as this trust year comes to a close.
The Legal Accounting Forum is the foremost source of news, insights and industry updates about legal accounting. Established by LEAP Legal Software, the Legal Accounting Forum features articles by LEAP’s legal accounting experts, who bring over thirty years’ experience to ensuring LEAP’s world-class software meets the needs of legal and accounting professionals. The Legal Accounting Forum is committed to providing advice on best practice, industry updates and managing regulatory compliance.
If you want your firm’s external examination to run as smoothly as possible, take the time now to get ahead and review any outstanding trust accounting issues that the examiner will also be reviewing. Some issues to consider now include:
A complete list of checklist items is available on the Legal Accounting Forum here.
It is mandatory to notify your governing law society of several events. If you operate a trust account, you must notify the law society within the designated time frame. This time frame can vary depending on the state you operate in. However, it is common practice that a firm must open a general trust account ‘as soon as practicable’ after first receiving trust monies. If you’ve forgotten to notify your law society about opening a trust account, Simon details what you need to do to resolve this prior to your examination here.
Depending on the state you operate in, you also have obligations around appointing external examiners and notifying your law society of this. For example, if you operate in New South Wales, then you must notify the Law Society within seven days if your previously appointed examiner ceases to act. There are particular requirements for notifying a law society of the appointment or termination of an external examiner that Simon explores here.
Again, depending on the state you practice in, different procedures apply in respect of dormant and unidentified trust money. For example, you may be required to transfer said money to the Law Society, Office of State Revenue or the Public Trustee. Time periods apply here, so it’s best to confirm what is applicable for your state.
Don’t forget that some states are required to recalculate their statutory deposit as at 31 March, while other states like South Australia are required to recalculate twice a year. The Uniform Law requires that all deposits and withdrawals should be recorded in the statutory deposit ledger account. If you haven’t set up your dedicated statutory deposit.
The Legal Accounting Forum is committed to providing relevant insights, news and industry updates about legal accounting. If you’re a legal professional, accountant or bookkeeper, you can find a full list of the Forum’s articles here.