1 October 2018
Audit reporting: recap and reminders for next year
All licensed real estate agents are required to lodge a trust account audit or statutory declaration as appropriate with the Commissioner for Consumer Protection by 31 March each year. This year, 31 audit reports and more than 300 statutory declarations were still outstanding at the end of lodgement period. Consumer Protection initiated action to follow up on those outstanding lodgements.
Areas for improvement
Each year, Consumer Protection observes a number of common problem areas identified in the auditors’ reports. This year’s reports contained a range of issues, with the most common being:
- Failure to perform monthly bank reconciliations;
- Failure to submit the audit report on time;
- Failure to maintain accounting records; and
- Overcharging fees.
As it does each year, Consumer Protection will continue to ensure agents comply with their legislative obligations. Where an audit has been qualified, we will formally investigate the matter where appropriate, or take compliance action. If the qualified audit merits compliance action, this will include notifying the agency of that qualification and remind them of their obligations to rectify the issues. Compliance Officers will then make personal follow up visits to a sample of agencies to ensure they have instigated the required rectification action.
Trust account audit qualifications has more information about common trust accounting issues and how to deal with them.
Penalties for non-compliance
The Commissioner for Consumer Protection has various powers in relation to the audit of agents’ trust accounts.
Where the audit report issue is minor or low risk, we may provide an agent with educational advice. If the problem is more significant, we may issue a formal administrative warning.
If an agent fails to have an audit conducted or fails to submit an audit report or statutory declaration before the deadline, the regulations allow the Commissioner to apply modified penalties through the issue of infringement notices where appropriate.
While the next audit reports are due on 31 March 2019, you should remember that if you lodge a late statutory declaration or audit report, the Commissioner may impose a financial penalty.