Trust accounts

Did you deal in client monies through a trust account between 1 April and 31 March?

If so, you are obliged under the Trust Accounts Act 1973 (Queensland) and the Trust Accounts Regulation 1999 (Queensland) (PDF) to have your accounts audited within two months after 31 March.

The Department of Justice and Attorney-General supervise trust accounts legislation.

The Act prescribes direction in the operation of trust accounts in Queensland including:

  • annual declaration of monies held in a trust account
  • appointment of an auditor to a trust account
  • submission of an annual audit report
  • establishment of financial security
  • annual unannounced examination of a trust account.

Under the Act, the financial reporting period is 1 April to 31 March each year. At the end of each reporting period trustees are required to:

  • provide a declaration, witnessed by a Justice of the Peace, stating the highest amount of monies held in a trustee's trust account on any given day during the financial year ending 31 March. This declaration is due by 14 April for the current year
  • lodge a financial security based upon the declaration to the value of one third, or $10,000, whichever is the lesser. Financial security must be lodged by 14 April for the current year
  • an independent auditor’s report for the above financial period. Audit reports are due no later than 31 May.

The Regulation prescribes:

  • record keeping
  • disbursement of trust monies
  • audits and examinations
  • professional indemnity insurance
  • types of trust account security
  • 25 point audit report schedule.

Information regarding trustee obligations in the management of trust accounts, including establishment, operation, closure and audit of trust accounts is accessible on the Queensland Government website.

A copy of a qualified auditor's report must be forwarded by the auditor to the General Manager Public Practice at CPA Australia within 15 business days of the completion of the audit. An auditor is also required to report any identified deficiency of client monies to CPA Australia within five business days. Although unqualified reports are not required to be lodged, they must be maintained and will be reviewed as part of the Quality Review Program.

Client accounts

If you dealt in client monies through a client bank account, you are reminded of your obligations under APES 310 Dealing with Client Monies (PDF). You need to ensure that your compliance with the requirements of the standard is audited annually within three months of the applicable year-end date.

For members who obtained authority to transact in client monies before 1 July 2011, the applicable year-end date is 31 March. Members must comply with the audit requirements of APES 310 within three months of this date.

Members who obtained authority to transact in client monies after 1 July 2011 can choose the applicable year-end date as long as it is within 12 months of the month-end after obtaining the authority to transact. Once the year-end date is chosen it cannot be changed without approval from CPA Australia. Members have three months following their applicable year-end date to comply with the audit requirements of APES 310.

If you stop dealing with client monies you must ensure that compliance with APES 310 is audited within three months of ceasing.

A copy of a qualified auditor's report must be forwarded by the auditor to the General Manager Public Practice at CPA Australia within 15 business days of the completion of the audit. An auditor is also required to report any identified deficiency of client monies to
CPA Australia within five business days.

Although unqualified reports are not required to be lodged, they must be maintained and will be reviewed as part of the Quality Review Program

Independence issues

Members are reminded that the independence requirements set out in APES 110 Code of Ethics for Professional Accountants (PDF) apply to all audit and review engagements. The independence requirements are set out in sections 290 and 291 of the code.

The Joint Accounting Bodies' Independence guide provides extensive examples and case studies exploring common independence threats and how they can be addressed. Recent quality reviews indicate it is critical to assess and address potential threats to independence, such as self-review threats, which are created where the auditor or reviewer has some involvement in assisting with the preparation of the financial statements. The same independence requirements under the code apply regardless of the type or purpose of the audit or review engagement.

Examples include but are not limited to: engagements performed under the Corporations Act 2001 and the Associations Incorporation Act 1981 (Qld), or for other purposes such as the Queensland Building Services Authority Act 1991.