Dealing with Client Monies in Queensland

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) 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 written statement, witnessed by a Justice of the Peace, stating the highest amount of money held in a trustee's trust account during the previous financial period. This statement must be lodged by 14 April each year
• lodge a financial security based on the amount reported in your maximum cashbook declaration. The security is $10,000, or one third of the amount declared in your statement, whichever is less. Financial security must be lodged by 14 April each year
• an independent auditor's report for the financial period ending 31 March each year. Audit reports are due no later than 31 May each year.

The Regulation prescribes:

• record keeping
• disbursement of trust monies
• audits and examinations
• professional indemnity insurance
• types of trust account security
• 25 point list of Prescribed Information for Audit Report.

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 modified auditor's report must be forwarded by the auditor to the General Manager of Professional Conduct 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 unmodified reports are not required to be lodged, they must be maintained and may be reviewed as part of the Best Practice Program.

If you dealt in client monies through a client bank account, you are reminded of your obligations under APES 310 Client Monies. 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 if 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 modified auditor's report must be forwarded by the auditor to the General Manager of 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 unmodified reports are not required to be lodged, they must be maintained and may be reviewed as part of the Best Practice Program.

Members are reminded that the independence requirements set out in APES 110 Code of Ethics for Professional Accountants (the Code) apply to all audit and review engagements. The independence requirements are set out in Part 4B 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.