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Under the Legal Profession Act 2004 and Legal Profession
Regulation 2005 legal firms are required to have their trust
accounts examined by an approved auditor annually and submit an
"External Examiner's Report" to the Law Society of New South
Wales.
The Law Society requests that the External Examiners Report be
lodged by 29 May to ensure processing and any matters arising
may be addressed within the financial year.
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There are two possible reasons why you would not need to file
an audit report:
1.
You are not required to file an External Examiners Report to the
Law Society if your firm has never operated a trust account.
However, it is rare that a law firm would not operate a trust
account as it is generally accepted practice that funds are
collected from the client in advance. These funds have to be
held in a trust account. A firm would not keep a trust account
in a situation where they only bill for the work after it is
done and receive payments for these invoices.
2.
If the only trust money received or held by a law practice
during a financial year is transit money, the practice's trust
records in respect of that year are not required to be
externally examined. Under the Legal Profession Act 2004 "transit money" is defined as
"money received by a law practice subject to instructions to pay
or deliver it to a third party, other than an associate of the
practice".
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The External Examiner's Report may only be prepared by a
registered company auditor appointed under Section 1280 of the
Corporations Act 2001.
Michael Quinn is a registered company auditor (registered by
ASIC) and this allows Quinns to assist law firms in ensuring
their trust accounts meet The Law Society's regulations and
undertake the audit, making the reporting process a simple step.
The law firm has an obligation to notify the Law Society in
writing of the appointment of an External Examiner. The letter
should include the name, business address and contact number of
the External Examiner.
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The External Examiner is required by the Legal Profession Act
2004 to provide the law firm with a report that states whether
it has complied with the Act and the regulations.
The Quinn Group has a specialist auditing division with the
experience and qualifications required to conduct and issue such
Audit Reports and can assist you preparing for your reporting
obligations.
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After submitting an "External Examiner's Report" to the Law
Society of New South Wales you should keep a copy for your
records in a safe place.
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Our dedicated team can assist you with all your auditing
needs.
Complete
and submit the Express Enquiry form on the top right hand side
of this page and we will contact you to discuss your enquiry
or call us on 1300 QUINNS (1300 784 667) or on +61 2 9223
9166 to arrange an
appointment.
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