Trust account handbook - Department of Commerce - wa.gov.au

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2 2.7 Trust ledgers................................................................................................... .15 Sample ledger................................................................................................. .16 Transfer duty................................................................................................... .16 2.8 Buffer account................................................................................................. .17 2.9 Trust account transfer journal entries.............................................................. .17 2.10 Recording withdrawals of fee entitlements..................................................... .18 2.11 Balancing a trust account at the end of each month....................................... .18 Balance per bank statement........................................................................... .20 Add outstanding deposits................................................................................ .20 Less unpresented cheques............................................................................. .20 Balance per trust cash at bank....................................................................... .20 Example: Trust account reconciliation statement........................................... .21 PART 3 TRUST ACCOUNT AUDITS.............................................................................22 3.1 What are the annual duties of an agent regarding trust account audits?........ .22 3.2 What are an agent’s duties in appointing an auditor?..................................... .22 3.3 What are an agent’s responsibilities to the auditor?....................................... .23 3.4 What are the duties of an auditor?.................................................................. .23 3.5 How should an agent respond to an auditor’s recommendations?................. .24 3.6 What are an agent’s duties in changing an auditor?....................................... .24 3.7 What is a quarterly audit?............................................................................... .24 3.8 What if a settlement agency closes?.............................................................. .24 3.9 Unclaimed trust money................................................................................... .25 PART 4. PREVENTING THEFT AND FRAUD...............................................................27 4.1 Early indicators of theft and fraud................................................................... .27 4.2 Computer systems.......................................................................................... .28 4.3 Bank reconciliations........................................................................................ .28 4.4 Transfer journals............................................................................................. .29 4.5 Receipt books................................................................................................. .29 4.6 Agency management...................................................................................... .29 4.7 Cash payments or cheque payments............................................................. .29 4.8 Trust account management............................................................................ .30 4.9 What must an agent do on becoming aware of fraud or theft?....................... .30 Glossary.................................................................................................................... .31 SETTLEMENT AGENTS’ TRUST ACCOUNT HANDBOOK
Introduction The Settlement Agents Act 1981 (the Act) requires the strict maintenance of a formal set of trust account records that show at any time the state of a settlement agent’s trust account. This publication is designed to assist agents to establish and maintain a trust account recording system that complies with the Act. It also makes a number of recommendations that, while not prescribed by the Act, are considered to be best practice in maintaining trust accounts by the Consumer Protection Division of the Department of Commerce (Consumer Protection). This publication is not a comprehensive accounting text for agents and familiarity with its content is not sufficient to satisfy the requirement that agents have a sound working knowledge of the Act and the Settlement Agents Regulations 1982 (the Regulations). Reference material and the latest Consumer Protection requirements can be found on its website. Visit www.commerce.wa.gov.au/consumerprotection/settlement Using this publication • Part One answers general questions about trust accounting. • Part Two examines the documents and records that constitute the trust accounting system, which must be maintained by the agent. • Part Three discusses the agent’s duties and responsibilities relating to trust account audits. • Part Four looks at recommended practices for reducing theft and fraud within a settlement business Further information 3 Additional copies of this publication can be downloaded free of charge from the Consumer Protection website at www.commerce.wa.gov.au/CP/Auditors The Settlement Agent newsletters and e-Bulletins are used to inform the industry of Consumer Protection policy and best practice, and may be used to convey information about Consumer’s Protections’ auditing requirements. Archived issues of the Settlement Agents News and e-Bulletins are available in the website’s publication section. Visit www.commerce.wa.gov.au/ConsumerProtection/Settlement SETTLEMENT AGENTS’ TRUST ACCOUNT HANDBOOK
Page 1 and 2: Government of Western Australia Dep
Page 3: Table of Contents Introduction.....
Page 7 and 8: 1.5 Types of trust accounts General
Page 9 and 10: 1.10 What trust documents and recor
Page 11 and 12: The following calculation can be us
Page 13 and 14: PART 2 TRUST DOCUMENTS AND RECORDS
Page 15 and 16: cross-referenced against the interi
Page 17 and 18: • amount received; and • the to
Page 19 and 20: 2.8 Buffer account Agents sometimes
Page 21 and 22: Regular monitoring of trust account
Page 23 and 24: Example: Trust account reconciliati
Page 25 and 26: 3.3 What are an agent’s responsib
Page 27 and 28: As well as advising Consumer Protec
Page 29 and 30: PART 4. PREVENTING THEFT AND FRAUD
Page 31 and 32: everse the transaction. Agents shou
Page 33 and 34: GLOSSARY Act (The) The Settlement A
Page 35: Department of Commerce Consumer Pro

Trust account handbook - Department of Commerce - wa.gov.au

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