If you're new to the property game and dealing with trust accounts, the word "audit" might make your palms sweat a bit. Don’t worry—it’s not as scary as it sounds. In fact, trust account audits are just a routine part of real estate life.
Whether you're a fresh licensee or a growing agency, knowing what happens during an audit can help you stay calm, stay organised, and stay out of trouble.
Why Are Trust Account Audits Required?
Let’s start with the basics.
A real estate trust account is where you hold money on behalf of your clients—things like deposits, rent, or sales proceeds. That money isn’t yours, and that’s why the law requires you to handle it carefully.
To make sure everything is done properly, government regulations require most licensed real estate agents to have their trust accounts audited once a year. It’s all about protecting clients and keeping things transparent.
When Does the Audit Happen?
Audits usually happen after the end of the financial year (1 July to 30 June). If you’ve held any trust money during this period, you’re required to have your trust account audited.
In most states, the audit report needs to be lodged by 30 September. So, it’s best to be well-prepared before the rush begins.
What Will the Auditor Look At?
Now, here’s what most people wonder—what do auditors actually do?
In short, they check if your trust account is being managed correctly. This includes:
Bank statements and ledgers
Receipts and payments
Client files
Reconciliations
Compliance with trust account regulations
They’ll compare your records with the trust account bank statement to make sure everything matches. They’re not there to catch you out—they’re just verifying that the money has been handled properly.
This process is known as a Real Estate Trust Account Audit, and it plays a key role in keeping your financial records in line with legal obligations.
What Do You Need to Prepare?
Good recordkeeping is the best way to make an audit go smoothly. Before the auditor starts, make sure you have:
All bank statements for the financial year
Your trust account cashbook and ledger
Receipts and payment records
Any correspondence with clients involving money
Monthly bank reconciliations
If you’re using trust accounting software, great! That makes things even easier, provided your data is accurate and up to date.
Can You Fail an Audit?
Let’s be clear—an audit isn’t a school exam. But yes, if the auditor finds serious breaches or missing records, it can lead to compliance issues.
Common problems include:
Not reconciling your account monthly
Delays in banking trust money
Mixing personal funds with trust money
Poor recordkeeping
The good news? These issues are avoidable if you stay organised.
Tips to Make the Audit Stress-Free
Don’t wait until the last minute. Keep records tidy all year round.
Talk to your auditor early. They can guide you on what documents to prepare.
Do monthly reconciliations. It’s easier to fix small problems early.
Ask questions. If you're not sure about something, get advice from your accountant or auditor.
Final Thoughts
An audit doesn’t have to be a nightmare. Think of it as a yearly health check for your trust account. If you’re doing the right thing, you’ll pass with no stress.
Stay organised, follow the rules, and keep your records clean. That’s the secret to an easy audit.
And remember—you're not alone. Plenty of agencies go through this every year. With a bit of preparation, you’ll breeze through yours like a pro.