The motor vehicle dealer industry in Western Australia is regulated under the Motor Vehicle Dealers Act 1973. The Department of Energy, Mines, Industry Regulation and Safety is responsible for the administration of the Act. The Act requires a motor vehicle dealer to have an open trust account in which to deposit funds before taking any vehicle under a consignment agreement. Trust accounts are defined as accounts where money is received or held by a dealer on behalf of another person in relation to a consignment transaction. This guide is intended to help auditors produce high quality reports in the required format.

The guidelines include:

• Introduction
  • Audit requirement of trust accounts
  • Related legislation and publications
• Role as auditor of trust account
  • Appointment of an auditor of trust accounts
• Costs of audits
  • Confidentiality of audit information
  • Audit period – financial year
  • Auditor’s responsibility to deliver audit report
  • Late lodgement of audit reports
• Scope of Audit of Trust Accounts
  • Guidance for auditors
  • Documents to provide to the Commissioner
  • Important items to consider
  • Licence of the dealer
  • Contents of an audit report
  • Trust account – overdrawing
  • Qualified audit reports
  • Key legislative provisions
• Trust accounting requirements
  • Trust accounts
  • Auditing considerations
  • Designation of trust accounts
  • What trust documents and records must be maintained
  • How long must trust records be retained
  • What use is made of the documents and records
  • Trust receipts
  • Cash receipts journal and cash payments journal
  • Trust account reconciliation
• Consignment contract terms & conditions
• Problem areas identified by Consumer Protection
  • Use of buffer funds by dealers and undrawn commission
  • Use of suspense accounts to maintain unidentified deposits
  • Client’s trust ledger account in debit
  • Unclaimed moneys in trust account
  • Delay in banking of trust money by agents
  • Reporting overdrawn trust accounts
  • Incomplete audits
• Example of an Audit Checklist
  • Part one - General matters
  • Part two - Trust accounting
  • Questions to be completed before the audit report is submitted
• Frequently Asked Questions
• Appendix A: Format of Audit Reports
• Appendix B: Sample letters and forms
  • Example of Declaration by Auditor
  • Example of Statutory Declaration by Auditor
• Appendix C: References
• Glossary