Real Estate Trust Account Audits
Compliant, thorough audits for real estate agencies across NSW
If you're a real estate agent or agency holding client money, you need an annual trust account audit. It's not optional – it's required under the Property and Stock Agents Act 2002 (NSW) and the Property and Stock Agents Regulation 2022. Fair Trading NSW takes trust account compliance seriously, and so should you.
We bring over 15 years of audit experience from PwC, Ernst & Young, Deloitte, and Westpac to every trust account audit we conduct. When you're dealing with other people's money, the audit needs to be thorough, independent, and done right. That's exactly what we deliver.
Why Your Trust Account Audit Matters
Your trust account holds deposits, rental payments, and other client funds. When things go wrong – missing money, reconciliation errors, or regulatory breaches – the consequences are serious:
- ⚠️Fair Trading NSW can investigate your agency
- ⚠️Your real estate licence can be suspended or cancelled
- ⚠️You could face fines up to $22,000 for individuals or $110,000 for corporations
- ⚠️Professional indemnity issues if client funds are mishandled
- ⚠️Reputational damage that destroys your business
A quality audit protects you by identifying issues before they escalate, ensuring your trust account is compliant, and giving Fair Trading NSW confidence that your agency is operating properly.
What We Check During Your Trust Account Audit
Our audit follows Australian Auditing Standards and covers everything Fair Trading NSW expects to see:
1. Trust Account Reconciliations
We verify your monthly reconciliations are accurate, complete, and timely:
- • Bank statement balances match your records
- • Individual client ledgers reconcile correctly
- • All reconciling items are legitimate
- • Prepared within 10 business days
2. Transaction Testing
We test samples to ensure:
- • Deposits are receipted correctly
- • Payments are properly authorised
- • Journal entries are legitimate
- • GST and commissions handled correctly
3. Statutory Deposit Compliance
We confirm:
- • Required statutory deposit is maintained
- • Correct level based on annual turnover
- • Proper lodgement with Fair Trading NSW
- • Documentation is complete
4. Interest Calculations
For interest-bearing accounts:
- • Interest calculated correctly
- • Proper distribution to clients
- • Compliance with regulations
- • Agency agreement adherence
5. Trust Account Controls
We assess internal controls:
- • Segregation of duties
- • Authorisation procedures
- • Review and approval processes
- • Security over trust account access
6. Regulatory Compliance
We check specific requirements:
- • Deposit timeframe compliance
- • Withdrawal authorisation
- • Record maintenance standards
- • Required client disclosures
Common Trust Account Issues We Find
⚠️ These problems can trigger Fair Trading investigations:
1. Unreconciled Differences
The trust account reconciliation doesn't balance, and the agency can't explain why. This often indicates missing transactions, recording errors, or worse – misappropriation of funds.
2. Negative Client Ledger Balances
A client ledger shows a negative balance, meaning payments were made when insufficient funds were held for that client.
3. Late or Missing Reconciliations
Monthly reconciliations aren't done within 10 business days, or they're not done at all. This is a breach of regulations.
4. Inadequate Supporting Documentation
Payments lack proper authorisation, or deposits aren't supported by appropriate receipts and client instructions.
5. Mixing Trust and Office Funds
Commission or agency fees are taken directly from the trust account instead of being properly transferred.
6. Poor Record Keeping
Trust account records are incomplete, disorganised, or don't meet regulatory requirements.
The Comfort Big 4 Experience Brings
✓ Why our Big 4 background matters for your trust account audit:
Robust Audit Methodology
We use the same systematic approach, comprehensive testing procedures, and detailed documentation learned at PwC, Ernst & Young, and Deloitte. Your audit will withstand any regulatory scrutiny.
Understanding of Risk
Years of auditing complex financial institutions developed strong professional scepticism. We know where problems hide and don't just accept what's presented.
Technical Expertise
We quickly identify unusual items, spot potential issues, and determine whether something is a genuine error or a red flag requiring investigation.
Clear Reporting
Our reports meet Fair Trading NSW requirements while explaining findings in language you understand, with clear guidance on fixing any issues.
Independence
We have no financial stake in your business. You get genuine independence that Fair Trading NSW requires for trust account verification.
Attention to Detail
Big 4 audits are known for thoroughness. Small errors can indicate bigger problems, and we don't overlook them.
What Happens After the Audit?
Once we've completed our audit work, you'll receive:
1. Audit Report
The formal report required for Fair Trading NSW, stating whether your trust account records are accurate and compliant
2. Management Letter
A detailed letter highlighting any issues found, areas for improvement, and recommendations for strengthening procedures
3. Guidance
Practical advice on rectifying any problems and preventing similar issues in future
If significant issues are found, we'll work with you to understand what happened and what needs to be done to resolve them before lodging the audit report.
Trust Account Audit Fees
From $550
Fixed fee trust account audits
Small Agency
$550 - $1,500
Lower transaction volume
Medium to Complex Agency
$1,500 - $5,000+
Higher volume, multiple properties
Factors that affect pricing:
- • Annual turnover and transaction volume
- • Number of properties under management
- • Multiple trust accounts or branches
- • Quality of records and reconciliations
- • Sales versus rental property mix
- • Complexity of disbursements
- • Previous audit findings
- • Fee structure complexity
We'll provide a fixed fee quote after understanding your agency's specific circumstances. No surprises.
When Do You Need Your Trust Account Audit?
Your trust account audit must be completed and lodged with Fair Trading NSW within three months of your financial year end. Most agencies have a 30 June year-end, meaning the audit is due by 30 September.
We recommend starting the audit process in early July to allow plenty of time for:
- ✓ Gathering all required documentation
- ✓ Completing the audit testing
- ✓ Addressing any issues that arise
- ✓ Finalising the audit report
- ✓ Lodging with Fair Trading NSW
Don't leave it until the last minute. Give yourself time to get the audit done properly.
What You Need to Provide
To conduct your trust account audit efficiently, we'll need:
✓ Trust account bank statements (full year)
✓ Trust account ledger (all client accounts)
✓ Monthly trust account reconciliations
✓ Receipts and disbursement records
✓ Sample transaction documentation
✓ Statutory deposit evidence
✓ Details of any known issues
✓ Previous audit reports
The better organised your records, the more efficient the audit process will be.
Need a Trust Account Audit?
Get an independent, thorough audit that meets Fair Trading NSW requirements and protects your agency.
Based in Norwest, serving real estate agencies across Sydney and NSW