Trust Account Irregularity Report Information |
Reporting irregularities or suspected irregularities in a statutory trust account
This digital Trust Account Irregularity Report is to be used by a Managing Agent to report what is described within the Property Agents of Land Transactions Act 2016 (the Act) as a ‘deficiency’ or an ‘irregularity’ caused on a trust account,
As soon as practicable after a property agent becomes aware of an irregularity or suspected irregularity in a trust account maintained by the property agent, the Property Agents Board is to be advised and consideration should also be given to reporting the issue to their auditor, depending on the significance of the irregularity.
Any cases of suspected fraudulent activity involving trust monies must be reported to the Property Agents Board as a matter of utmost urgency. Advice to the property agent’s auditor is also advised.
Explanation of Terms
An ‘irregularity’ refers to discrepancies, differences, inconsistencies, or mismatches between two or more sets of information, records or documents.
Irregularities can pose significant risks if they are not addressed promptly as they could indicate problems such as accounting errors, operational ineffectiveness or at worst, fraudulent activities.
Scenario –
A ‘deficiency’ is defined in the Act as:
“… the non-inclusion or exclusion of the whole or any part of an amount that is required to be included in the account.”
Practically speaking, a deficiency in a trust account refers to a shortfall or lack of sufficient funds in a trust account which causes or would cause the trust account to be overdrawn or technically overdrawn.
The deficiency should be immediately made good by the immediate transfer of the amount of the deficiency e.g. from the property agent’s general trading account.
This digital Trust Account Irregularity Report is to be used by a Managing Agent to report what is described within the Property Agents of Land Transactions Act 2016 (the Act) as a ‘deficiency’ or an ‘irregularity’ caused on a trust account,
As soon as practicable after a property agent becomes aware of an irregularity or suspected irregularity in a trust account maintained by the property agent, the Property Agents Board is to be advised and consideration should also be given to reporting the issue to their auditor, depending on the significance of the irregularity.
Any cases of suspected fraudulent activity involving trust monies must be reported to the Property Agents Board as a matter of utmost urgency. Advice to the property agent’s auditor is also advised.
Explanation of Terms
An ‘irregularity’ refers to discrepancies, differences, inconsistencies, or mismatches between two or more sets of information, records or documents.
Irregularities can pose significant risks if they are not addressed promptly as they could indicate problems such as accounting errors, operational ineffectiveness or at worst, fraudulent activities.
Scenario –
- A trust account balance is $150,000, but the trust account ledger shows a total trust account balance of $148,000. The unexpected $2,000 difference suggests that a transaction may not have been recorded correctly, or there might be unauthorised withdrawals. This discrepancy warrants an investigation to identify why there is an inconsistency.
- Funds being incorrectly deposited into the Sales Trust Account that should have been deposited to the Rental Trust Account.
A ‘deficiency’ is defined in the Act as:
“… the non-inclusion or exclusion of the whole or any part of an amount that is required to be included in the account.”
Practically speaking, a deficiency in a trust account refers to a shortfall or lack of sufficient funds in a trust account which causes or would cause the trust account to be overdrawn or technically overdrawn.
The deficiency should be immediately made good by the immediate transfer of the amount of the deficiency e.g. from the property agent’s general trading account.