Real Estate Trust Account Audits: What to Expect

Running a real estate business can be tricky when audit time rolls around – but it really doesn’t have to be. At Madden Partners we understand that no real estate client is exactly the same. That’s why we take a personalised approach to every engagement. 

Our goal is to ensure you meet compliance standards, so that your real estate operations are legally sound – leaving you free to focus on efficiency and growth.

real estate trust accounts

What is a Real Estate Trust Account?

It is a legal requirement that if a real estate agent receives money from a client for sales and rentals, they must deposit it into a trust account held by an authorised financial institution. An ordinary bank account just won’t do. 

The purpose of the audit is to report on whether the money in the trust accounts (you may have more than one) has been properly spent, and trust records have been correctly maintained according to auditing legislation. 

The government can inspect a trust account at any time, and if there are any breaches of the law, penalties can apply.

Audit Dates and Compliance Obligations

Each state has varying compliance obligations and due dates for real estate trust account audits. 

In New South Wales, the audit must be completed within three months after the financial year ended June 30, whereas in Queensland, the due date of the audit is based on the month the licence was obtained. 

It is important to be informed and know what’s required in your state. We keep comprehensive records of the due dates applicable to each of our clients so that we can remind you, our valued client, of when audit time is approaching. 

We even give you a detailed checklist of everything you need for us to get the process done. Being prepared means we have adequate time to discuss your needs and obligations as well as fully plan and assess the scope of the audit.

Understanding the Real Estate Audit Process

We take advantage of modern technology to facilitate a fully remote and streamlined approach to the audit process so that we can take care of your needs wherever you are. This also makes it more convenient and easier to switch from your current auditor. 

The process for real estate audits involves three steps: planning, testing, and reporting. We take care of it all, leaving you to do what you do best. 

Planning the audit is an essential aspect of an audit engagement, where the auditor gauges the scope of the work, the required audit tests, and review of internal controls. We take the time to get to know you and your business to get a thorough understanding of your audit requirements, as well as keep you informed throughout the process. 

We pride ourselves on being available and approachable so that you have access to the crucial information you need to get the most out of the planning discussions. Once the scope of the work has been established during the planning phase, we get to work with audit testing, which is tailored to your business. 

Audit testing is comprehensive and may include reviews of internal controls, reviews and reconciliations of accounting data, and compliance with relevant legislation. At Madden Partners we treat the audit as an opportunity to give you practical recommendations to enhance your business operations.

Audit reporting is the final step. Upon completion of the audit process, we prepare the audit report and lodge it with the relevant state body. But our service doesn’t end there! 

What happens on completion of a real estate audit?

You need to be confident your auditor will keep you not only up-to-date but also informed. We will get in touch to discuss the outcome of your real estate audit in detail, ensuring that you understand the outcomes and know exactly what steps to take moving forward. 

It is not only the report itself that is important at this stage, but the practical recommendations that we provide at no additional cost.

For a discussion around your audit needs, contact Ellie today at 02 6361 0735 and take advantage of our upfront fixed pricing and our professional, people-first approach. 

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