Annual trust account reviews
Trustees must ensure their trust accounts are independently reviewed at certain periods or if requested by the QBCC. The trustee must engage an auditor to carry out account reviews.
- There is NO set review period for project trust accounts.
- For retention trust accounts, account reviews must occur at the end of a review period .
- The QBCC can give a direction for an account review of a project trust account or a retention trust account. In this case, the review period and timeframes for compliance will be stated in the direction.
The review period for retention trust accounts is:
- for the first annual review—12 months starting from the day the account was opened
- for a subsequent annual review—12 months starting the day after the previous review period ended
- for closure of a retention trust account—the day the account was opened (if no previous review has been undertaken), or the day after the last review was completed, until the day the account was closed.
The account review must:
- start within 20 business days of the end of the review period (or within 20 business days of the account being closed)
- be completed within 40 business days after the review commenced.
The auditor must:
- prepare an account review report and submit this to the QBCC within 20 business days after completing the review.
- provide a copy of the review report to the trustee for their records.
When a trust account review is not required
Trustees are exempt and do not need to engage an auditor to complete a retention trust account review if BOTH of the following apply:
- no retention amounts were held in the trust account during the review period
- the QBCC is given a notice (advising why the trustee did not engage an auditor to carry out the review) within 10 business days after the end of the review period using Form TA5—notice of no trust account review using Form TA5.
Auditor to conduct review
The trustee must engage an auditor to carry out account reviews. The auditor must be:
- independent of the trustee (for example, not an employee or related entity to the trustee)
- a registered company auditor—registered company auditors can be found using the ASIC register
- not excluded by the QBCC commissioner.
The trustee is responsible for engaging the auditor. There is no requirement for the trustee to notify the QBCC of the appointment.
Once an auditor is engaged, the trustee must give them access to any trust records requested by the auditor to enable them to carry out the review.
Role of the auditor
There are a range of rules for using a trust account (administration requirements) and other obligations on the trustee in relation to compliance with the trust framework. The trustee is responsible for ensuring both administration requirements and other obligations are met.
An auditor is only required to assess compliance as it relates to the administration of the trust.
An auditor must:
- conduct a review of the trust account records based on a methodology as outlined in ASAE 3100 (Compliance Engagements) for conducting a reasonable assurance engagement on compliance
- prepare an account review report to detail the outcome of the review including whether they believe the trustee has complied with the requirements for the administration of the trust account or outline areas where non-compliance has been identified
- submit their account review report to the QBCC online via myQBCC
- provide a copy of the account review report to the trustee.
For more information, view the Auditor guide—trust accounts (PDF 714KB).
If, when completing the account review, an auditor believes that any serious instances of non-compliance or irregularities apply in relation to the trust account and/or the trustee, these must be reported to the QBCC within 5 business days of forming the opinion, either:
- online via the myQBCC portal or
- completing and lodging a Form TA6:
Account reviews (external audits)—FAQs
For a retention trust, an account review must be conducted annually and upon closure of an account. The QBCC may also direct a review outside of these timeframes.
For a project trust, an account review need only be completed if directed by the QBCC. This will only happen in very specific circumstances.
The QBCC can only give an account review direction if:
- the contract for which the trust account was set up has been terminated
- the contracted party becomes an insolvent under administration
- the trustee has their QBCC licence suspended or cancelled or (if licensed) does not satisfy the minimum financial requirements, or
- the QBCC suspects the trust account is not being used correctly / compliantly.
No. PBAs are not subject to account review requirements. However, PBAs that were transitioned to trust accounts under the new framework are subject to the account review requirements.
Can trust account reviews be done by an independent accountant (e.g., whilst doing the end of year financial accounts) rather than an auditor?
No. All trust account reviews must be carried out by a ‘registered company auditor’ (these auditors are listed on the ASIC registered auditor register).
The timing for the review will not necessarily align with the financial year – the review period is a year from opening the account, then each subsequent year, and the period between the last review period ending and the account closing. However, a trustee may request a change to their review period end date to align with their usual business reporting cycle.
- Request/sight evidence from the auditor of their ASIC registration
- Check the ASIC register of registered company auditors (if you are unable to verify from the auditor's evidence)
- Check the QBCC website to make sure they are not an excluded auditor.
What are the professional auditing standards that an auditor must meet and how are they relevant when auditing a trust account?
When carrying out trust account reviews, auditors must comply with the Standard on Assurance Engagements ASAE 3100 (Compliance Engagements) formulated by the Auditing and Assurance Standards Board (AUASB)
As professional members of Certified Practicing Accountants Australia (CPA Australia), Chartered Accountants Australia and New Zealand (CAANZ), or the Institute of Practising Accountants, auditors must also adhere to standards set by the Accounting Professional and Ethical Standards Board (APESB). They have a responsibility to act in the public interest and comply with the fundamental principles of integrity, objectivity, professional competence, due care, confidentiality and professional behaviour in all dealings. This includes when conducting a trust account review for a trustee.
This depends on the terms of engagement and should be discussed and agreed upon at the outset.
What happens if financial accounts haven't been completed by the accountant in time for an account review, or if the trustee is on holidays?
The legislation requires that an account review commences within 20 business days after the review period end date. It must then be completed within 40 business days of being started and submitted to the QBCC within 20 business days of completion. Trustees will need to ensure they are able to comply with these timeframes. However, a trustee may request a change to their review period end date to align with their usual business reporting cycle.
Notice timeframes are given in business days rather than calendar days. A business day does not include a weekend, a public holiday or the period from 22 December of a given year to 10 January of the following year.
The QBCC does not intend to routinely remind trustees when their account reviews are coming up. The obligation is on the trustee to ensure the trust account is administered and reviewed in accordance with the legislation.