Reminder - Trust account audit period has commenced: Real estate bulletin issue 169 (January 2018)

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Property industry

15 January 2018

Trust account audit period has commenced

All agents who hold a current triennial certificate and have held or received monies in trust during the 2017 calendar year, or part thereof, are required to have their trust accounts audited for the period by an auditor approved by the Commissioner for Consumer Protection (the Commissioner).

Agents who have not held or received monies in trust during the 2017 year should submit a Declaration of no receipt of trust funds in lieu of an audit report.

The annual audit report or statutory declaration for the year ending 31 December 2017 must be lodged with the Commissioner by 5pm on 31 March 2018

An infringement notice may be issued where an audit report or declaration of ‘no receipt of trust funds’ is received after 31 March 2018, or not at all.

Agents who have held the roles of the agent in bona fide control, branch manager, licensed director, partner or licensed partner for another licensed trading entity may not be required to submit an audit or statutory declaration for their individual licence, for the period of which they held that role.

Agents operating a business under their individual licence and triennial certificate as a sole trader, and have held or received trust monies during the 2017 year, will also need to follow the audit requirements for their trust accounts.

The following reminders may assist agents and auditors to fulfil their obligations under Section 70 of the Real Estate and Business Agents Act 1978.

Reminders for real estate agents

  • Disclose all trust accounts, including interest bearing trust accounts, to the auditor in order for the audit report to be accurate.
  • Provide the auditor with all records relating to discrepancies in trust accounts, regardless of how the error occurred or whether the department has already been notified.
  • Ensure the address provided in any statutory declaration is the agent’s current address.
  • Only submit a statutory declaration of no funds held if the agent did not hold or receive any money for or on behalf of others during the audit period (1 January 2017 to 31 December 2017).

 

Reminders for auditors

  • Disclose all trust accounts, including interest bearing trust accounts, in Annexure A with the proper titling as per the bank records. This includes accounts closed during the audit year.
  • List all interest bearing trust accounts separately in Annexure A with the proper titling as per the bank records.
  • Ensure the correct titling of trust accounts as described in Regulation 6 of the Real Estate and Business Agents (General) Regulations 1979.
  • Ensure the entity name and business name are correct on all documents within the audit report including statutory declarations.
  • Check the agent’s business name is registered with Australian Securities and Investments Commission.
  • Check the agent’s address is correct.
  • Confirm witnesses to statutory declarations are authorised persons, with full name and qualification listed.
  • Disclose all instances of discrepancies associated with trust accounts including errors made by financial institutions or the agent.
  • Use the audit report templates provided on the website.
  •  Make a note of any trust account matters for communication to the Commissioner in the statutory declaration, and attach a management letter detailing these matters. If a management letter is not required, please do not mention it in the cover letter.
  • Have all parties complete and sign the Change of Auditor Request Form if there has been a change of auditor since the last audit.
  • Ensure the audit report is complete with no missing pages and that the statutory declarations by agent and auditor are included.

For further information and details go to the publication A guide to auditing trust accounts: Real estate agents, business agents and settlement agents and business settlement agents on the Department’s website.

Agents and auditors are encouraged to submit audit reports and statutory declarations via email to audits@dmirs.wa.gov.au.  You are not required to submit a hard copy of your audit report or statutory declaration if you have submitted it electronically.

Further information on auditing real estate agents is available on Consumer Protection’s website. 

You can contact the audits team by email at audits@dmirs.wa.gov.au or by telephone on (08) 6251 2721 if you have any queries in relation to the audit process.

 
Consumer Protection
Bulletin
Last updated 23 Jan 2018

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