8 September 2016

Settlement agents are required to have their trust accounts for the year 1 July 2015 to 30 June 2016, or part thereof, audited by an auditor approved by the Commissioner for Consumer Protection (the Commissioner).

The auditor must provide the audit report to the Commissioner by 30 September 2016.

To assist settlement agents and auditors in completing audits and fulfilling the requirements under Section 51(1) of the Settlement Agents Act 1981, the Consumer Protection Division of the Department of Commerce provides the following lists of reminders which may assist.

Reminders for settlement agents

• Settlement agents must disclose all trust accounts to their auditors (this includes accounts that may not have been used recently) in order for the Annexure A part of the report to be accurate.
• All records relating to discrepancies in trust accounts must be provided to the auditor, regardless if made by settlement agent or by bank.
• Ensure the address provided in any statutory declarations by settlement agents is the agent’s current address.
• A statutory declaration of ‘no funds held’ should only be submitted if the agent did not hold or receive funds for, or on behalf of others during the 2015/2016 financial year.
• Penalties may apply if the audit report or statutory declaration (as is applicable) is not provided to the Commissioner by 30 September 2016. 

Reminders for auditors

• All trust accounts need to be disclosed in Annexure A, with the proper titling as per the bank records.  Include any accounts closed during the audit year.
• All interest bearing trust accounts need to be separately listed in Annexure A, with the proper titling as per the bank records.
• Check the titling of trust accounts to ensure they are as per Settlement Agents Regulations 1982 (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 that the agent’s business name is a registered business name with Australian Securities and Investments Commission.
• Check that the agent’s address is correct especially if auditors are using template reports of other agents.
• Ensure statutory declarations are witnessed appropriately by authorised witnesses, listing their full name and qualifications.
• All instances of overdrawn trust accounts must be disclosed, including cases which relate to errors made by financial institutions or the agent.
• Use the audit report templates provided within our publication: A guide to auditing settlement agents’ trust accounts.
• Any matters that need to be communicated to the Commissioner in relation to the trust account should be noted in the auditor’s statutory declaration. Attach a management letter to the audit report detailing the matters. If no management letter is attached please do not mention a management letter in the cover letter.
• Ensure the audit report is complete – check all pages are included, statutory declarations by agent and auditor are included, and that all trust accounts open at any time during the audit year are listed in Annexure A.
• Incomplete audit reports cannot be accepted and will remain outstanding until complete reports are provided and accepted by the Commissioner.

Change of Auditor

• Where there is a change of auditor, please ensure that the Change of Auditor Request form is completed and signed by the agent, the new auditor and the outgoing auditor.
• Please note that the Commissioner is unable to accept audit reports where the auditor has changed but no Change of Auditor Request form has been received and approved.

Further information

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 is available at auditing settlement agents.

You can contact the audits team by email or by telephone on (08) 6251 2721 if you have any queries in relation to the audit process.