NSW Fair Trading Announces New Trust Account Audit Rules

Amendments to the Property, Stock and Business Agents Act 2002, will commence from 1 July 2013. These amendments will change the way licensees fulfil their responsibilities in relation to the auditing of trust accounts.

Currently, licensees who have held or received trust money during their audit year are required to have their trust accounts audited and lodge the audit returns with NSW Fair Trading whether the audit was qualified or not.

Licensees who did not hold or receive trust money during their audit year are required to lodge a statutory declaration with Fair Trading to that effect.

New Laws
The amendments provide a new framework for how licensees handle their trust account auditing responsibilities under the Act, commencing from the 2012/2013 audit year.

The changes include:

  • While all licensees who held or received trust money during their audit year will still need to have their trust accounts audited, only those audits which are qualified by the auditor are required to be lodged by the auditor and licensee with Fair Trading.
  • The term ‘qualified’ is now defined in the amendments to the Act.
  • The list of persons who are qualified to audit trust accounts under the Act is extended to include authorised audit companies, members of a Professional Accounting Body as defined under the ASIC Regulation 2001 (ie. CPA Australia, Institute of Chartered Accountants in Australia and National Institute of Accountants) holding a Public Practising Certificate with one or more of those bodies.
  • A requirement on the auditor to forward a copy of the trust account audit (if qualified) to Fair Trading within 14 days after providing the report to the licensee.  A maximum penalty of 50 penalty units ($5,500) is provided for a breach of this requirement.
  • Licensees who did not hold or receive trust money during the audit year will no longer lodge a statutory declaration to that effect.  Instead, licensees will be required to note whether or not they did so when they next re-apply for their licence.
  • Licensees are now required to hold a copy of their trust account audit (whether qualified or not) at their registered place of business, for at least 3 years, and make it available to Fair Trading inspectors for examination if required.

Click here to view the New Trust Account Audit Rules in detail on the NSW Fair Trading website.

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