14 July 2016

Settlement agents are required to have their trust accounts for the financial year ending 30 June 2016, or part thereof, audited. The Commissioner for Consumer Protection (the Commissioner) must approve the auditor. The auditor must provide the audit report to the Commissioner by 30 September 2016.

The below mentioned forms and publications relating to auditing settlement agents' trust accounts are available from Consumer Protection's website.

The following list of reminders may assist settlement agents and auditors in completing audits and fulfilling their obligations under Section 51 of the Settlement Agents Act 1981.

Reminders for settlement agents:

• Disclose all trust accounts, including interest bearing trust accounts, to the auditor in order for the Annexure A part of the report to be accurate.
• Provide the auditor with all records relating to discrepancies in trust accounts, regardless of how the error occurred.
• Ensure the address provided in any statutory declaration is the agent’s current address.
• Only submit a statutory declaration of no funds held if the agent did not hold or receive any money for or on behalf of others during the 2015/2016 financial year.

Reminders for auditors:

• Disclose all trust accounts in Annexure A with the proper titling as per the bank records. This includes accounts closed during the financial year.
• Separately list all interest bearing trust accounts in Annexure A with the proper titling as per the bank records.
• Check the title of trust accounts to ensure they are as per Settlement Agents Regulations 1982 including name of Triennial Certificate (TC) holder, business name of TC holder, TC number and SA Trust Account.
• Ensure the entity name and business name are correct on all documents within the audit report including statutory declarations.
• Check the agent’s business name is a registered business name with Australian Securities and Investments Commission.
• Check the agent’s address is correct.
• Ensure the witness to statutory declarations is authorised, list their full name and qualifications.
• Disclose all instances of overdrawn trust accounts including errors made by financial institutions or the agent.
• Use the audit report templates provided within A guide to auditing settlement agents’ trust accounts.
• The auditor can note any matters that they would like to advise Consumer Protection of within the statutory declaration by the auditor. Please also detail the matters within a management letter attached to the declaration. If a management letter is not required, please do not mention it in the cover letter.
• Have all parties complete and sign the Change of Auditor Request form if there has been a change of auditor since the last audit.
• Ensure the audit report is complete with no missing pages and the statutory declarations by agent and auditor are included as well as the Annexure A properly listing all trust accounts open at any time during the audit year.

Agents should arrange for an audit early enough to ensure the audit report can be delivered to the Commissioner on time.

The Commissioner may issue an infringement notice for any audit report or statutory declaration of no receipt of trust funds received after 30 September 2015. Therefore agents should ensure they maintain a written record of any communication with their auditor, including advising the auditor that records are ready for auditing and the dates the auditor attends the agent’s office.

Agents and auditors are encouraged to submit their audit reports and statutory declarations via email.

You are not required to submit a hard copy of your audit report or statutory declaration if you have submitted it electronically.

Further information on auditing settlement agents is available on Consumer Protection’s website. 

You can contact the audits team by email or by telephone on (08) 6552 9583 if you have any queries in relation to the audit process.

Update: ATO guide on recent tax reform is now available

The Australian Taxation Office (ATO) has developed the Capital gains withholding: Impacts on foreign and Australia residents guide for settlement agents on the recently introduced foreign resident capital gains withholding tax outlined within bulletin issue 56.

Queries on the withholding tax should be directed to the ATO.