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Law Society of NSW External Examiner Update to be released in March



Law Society of NSW External Examiner Update to be released in March

Published Feb 02, 2019

Next month Solicitors will see The Law Society’s external examiner update for 2019. This blog looks at some of the key findings and how to ensure you’re doing the right thing.

According to the Law Society of NSW,  ‘Under the Legal Profession Uniform Law (NSW) and the Legal Profession Uniform General Rules 2015, a law practice is required to have its trust records externally examined once in each financial year if it has received or held trust money, excluding transit money.

‘An external examination covers a law practice’s trust records from the beginning of April to the end of March in the following year. A report on the examination must be lodged with the Law Society by 31 May each year.’

The Law Society’s external examiner update for 2019 will soon be released. With this in mind it’s a good time to reflect upon external examinations of trust accounts.

It’s also an ideal time to see what we can anticipate for examinations  ending 31 March 2019.

The external examiner’s update highlights some key statistics from the previous year and provides insight from the Law Society for the upcoming external examination season.

 

THE EXTERNAL EXAMINER UPDATE IN 2018 HAS DETAILED SOME CONCERNING STATISTICS IN RELATION TO THE 2016 AND 2017 EXAMINATIONS.

These are worrying trends when talking about trust and controlled money.

The most common breaches reported were for trust account bank reconciliations recording adjusting items for extended periods of time and for trial balances and bank reconciliations not being prepared within 15 working days of month end.

 

SO HOW YOU CAN AVOID BREACHES?

A number of these breaches could have been easily avoided if holders of trust and controlled money took the following precautions:

 

WHAT DO WE RECOMMEND?

We believe planning is paramount as trust accounting can be complex and bookkeepers are often stretched for time.

We recommend that if you have had issues with breaches in the past or if you are looking to gain comfort your procedures are safeguarding you from future issues you should get in contact with a qualified external examiner and discuss:

 

This blog was written by Jacob Sauer. Jacob is one of our Audit Manager’s responsible for trust account external examinations and consulting. If you have any questions about trust accounting or external examinations Jacob can be contacted on 6773 8400.



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