A comprehensive checklist for a successful trust fund audit
As the end of the financial year 2024 (EOFY) approaches, it’s time to prepare for trust fund audits mandated by NSW Fair Trading. While audits can be stressful, this guide provides a checklist and tips to ensure you’re fully prepared and confident.
Preparing for Trust Fund Audits with Confidence
With the EOFY approaching, trust fund audits required by NSW Fair Trading are the next big task. The prospect of an audit can be stressful, but it doesn’t have to be daunting. Here’s a handy checklist of items your auditor will request and key points they’ll check.
Understanding the Audit Scope
Auditors review records from the current financial year FY2024. They typically examine a sample of your financial records using a sampling technique to draw conclusions.
Essential Audit Checklist
Ensure you can provide the following items for each trust account:
- Ledger accounts
- Monthly bank reconciliation
- List of account adjustments
- Receipts cashbook/receipts journal
- Hard copy of bank statements and reconciliation records
- Payments cashbook/payments journal
- Copies of EFT transfers
- Remittance advices
- Unpresented cheques list
- Unpresented deposits list
- Trial balance
- Journal report
Make sure you can produce copies of receipts from your trust accounting software if requested.
What Your Auditor Will Look For
In addition to the checklist items, your auditor will check:
- Has the trust account any dormant transactions
- Has the trust account fallen into negative?
- Has the licensee or officer signed off on records within the prescribed period?
- Has trust money been banked within the prescribed time?
- Have statements of accounts been provided?
- Are transactions sequential with a clean audit trail?
- Is the software compliant with relevant legislation?
How Number Solutions Tax & Accounting Can Help
Number Solutions Tax & Accounting provides timely and quality audit services, ensuring compliance with legislation and managing the entire audit process efficiently. Our team prepares your records and identifies issues in advance, making the audit process smooth and stress-free.
Consequences of Failing an Audit
In NSW, failing an audit or breaching regulations results in a ‘Qualified Audit,’ requiring notification to NSW Fair Trading.
Reducing Audit Stress
Audits are complex but manageable. Engage a trust accounting professional like Number Solutions Tax & Accounting to ensure compliance and manage the audit process from start to finish. This will help you pass audits smoothly and focus on your core business activities.
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