Role of the trustee on accountant trust accounts
A trust account is an account where you (as a trustee) can hold money on behalf of a client.
Trustee means any public accountant who receives money on behalf of another person and is required to account to that person.
The role of a trustee is to:
- set up new trust accounts
- report on created trust accounts.
Create a new trust account
How to set up a new trust account
These steps are for public accountants in Queensland who operate trust accounts.
- Before you set up a trust bank account, you (the trustee) will need to advise us (the Department of Justice and Attorney-General) on business letterhead that you intend to create a new trust account. You need to tell us the name and branch of the financial institution where you plan to open the account.
- You must lodge a Form 1—New trust account, within 14 days of your trust account being set up. This will provide us with details relating to the newly created trust account and that you have become the trustee under the Act.
- Appoint a qualified auditor for your trust account and advise us by letter or email within 30 days of that appointment including the full name and business address of the auditor. To find out more about qualifications and appointment of auditors see section 14 and 15 of the Trust Accounts Act 1973.
- If your financial institution requires approval from us before setting up a trust bank account, you will need to formally request approval from us on business letterhead. We will then write to your bank granting permission.
New trust account checklist
Here are some questions to consider when setting up a trust account.
Before setting up a trust account:
- Have you (the trustee) notified us (the Department of Justice and Attorney-General) that you intend to create a trust bank account?
- Does the financial institution require approval from us before setting up a trust bank account? If yes, you will need to formally request approval from us on business letterhead. We will then write to your bank granting approval for you to set up a trust account.
After setting up a trust account:
- Have you set up the trust bank account at a financial institution?
- Have you lodged a Form 1—New trust account?
- Have you appointed an auditor to the trust account and notified us?
- Have you asked the auditor to endorse their appointment?
Report on a trust account
Once you (a public accountant who operates a trust account) set up a new trustee account, you have reporting requirements each year.
The financial period for a trust account is 1 April to 31 March each year. At the end of each financial year you must provide:
- a statement declaring the highest amount of funds held in trust
- a financial security
- an independent auditor’s report.
If you do not comply with these requirements, you might be prosecuted under the Trust Accounts Act 1973.
Statement of highest amount held in trust
You must provide a statement, witnessed by a Justice of the Peace or Commissioner of Declarations, declaring the largest amount of money in your trust account during the previous financial year. You must lodge the statement to us by 14 April each year. You can lodge this statement by submitting one of these forms:
- Form 4A Proforma if you are exempt from providing financial security. Read more about exemptions under Financial Security.
- Form 4B Proforma for all other trust accounts.
- Business letterhead.
You must lodge a financial security by 14 April each year based on the amount reported in your statement. A security of $10,000 is required, or one third of the amount declared in your statement, whichever is less.
However, if your trust account meets the following conditions, you do not need to lodge a financial security:
- the nature of the business relates solely to income tax refunds
- the trust funds are banked daily and paid out by the end of the day to affect a cashbook balance of nil.
For more information, refer to Queensland Government Gazette No. 21 for 24 May 2002, page 304.
Submit an independent auditor’s report with us by 31 May each year which must address the 25 point Prescribed Information for Audit Report schedule set out in section 23 (1) of the Trust Accounts Regulation 1999.
We have created a 25 point schedule guide to help your auditor prepare the report. The original audit report must be posted to us.
It is the trustee’s responsibility to ensure the audit report is lodged with the Department of Justice and Attorney-General.
Changes to a trust account
If you need to make changes to your trust account, such as a new trust account name, address or new trustee, you must advise us within 14 days. You can notify us by submitting a Form 2— Maintenance of particulars.
If you are no longer going to be the trustee to a trust account, you will need to advise us by using the Form 3—Ceased to be a trustee.
Closing a trust account
When a trust account is closed, you (the trustee) must:
- Immediately notify us on business letterhead.
- Arrange an audit of the trust account, from the start of current financial year until the day it was closed.
- Lodge a final audit report with us within 2 months of closing the account.
Once you have completed these requirements and all outstanding issues have been resolved, any financial security will be returned to you or your financial institution.
Internal Audit Unit–Department of Justice and Attorney-General
GPO Box 149
BRISBANE QLD 4001
Phone: (07) 3109 9113 or (07) 3006 2541