Running a business comes with its fair share of responsibilities. And if your business holds money in trust—on behalf of clients—you’ve got one more important thing on your plate: trust account audits.

In New South Wales, these audits aren’t just a “nice to have.” They’re a legal requirement, and skipping them can get you into serious strife.

First Things First—What’s a Trust Account?

If you're handling money that doesn’t belong to your business—like a rental deposit, settlement funds, or legal fees held before they're earned—you’re likely using a trust account. That money needs to be handled carefully and separately from your business funds.

In other words, you’re the temporary caretaker of someone else’s money. And that comes with rules.

What Is a Trust Account Audit?

A trust account audit is a yearly check-up done by an independent auditor. They review your trust account records to make sure everything is above board. Think of it as a health check for your bookkeeping.

The audit looks at whether you're managing the account correctly and sticking to the rules set by regulators like NSW Fair Trading or the Law Society (depending on your industry).

Do I Need to Get One?

If you're a real estate agent, solicitor, conveyancer, or anyone else who’s legally required to operate a trust account, then yes, you need to have your trust account audited.

Even if you haven’t touched the account all year, you still might need to report that fact. It’s always safer to check.

Here’s where it gets a bit broader: businesses interested in how this works nationally often search for what’s required under a Trust Fund Audit in Australia—since requirements can differ state to state. NSW has its own guidelines, but the core idea is the same everywhere—transparency and trust.

What’s the Auditor Looking For?

Auditors don’t show up with a magnifying glass and a bad attitude. They’re mainly there to check:

• That client's funds are properly recorded

• That your records are accurate and complete

• That you’ve kept trust money separate from your business funds

• That you’ve met reporting deadlines

If you’ve got good processes in place, there’s nothing to stress about.

Deadlines Matter

In NSW, most audits need to be completed and submitted by 30 September following the end of the financial year. Missing that deadline? Not ideal. You could face fines or even get flagged by the regulator.

It’s worth setting reminders early. Don’t wait until September to start sorting your records. That’s a fast track to stress.

What If You Skip It?

Look, no one likes paperwork. But skipping an audit isn’t something you can sweep under the rug. Ignoring it could cost you your licence—or worse, your business reputation.

If your auditor finds something off, you’ll need to fix it quickly and report it where required. But don’t panic—most issues are fixable if caught early.

A Few Practical Tips

• Keep your trust records tidy year-round.

• Use accounting software if it helps, but don’t rely on it blindly.

• Always double-check your bank statements.

• Don’t mix trust funds with business or personal funds. Ever.

Also, don’t be afraid to ask your auditor questions. They’re there to help, not to play “gotcha.”

Final Thoughts

Trust account audits might sound scary, but they don’t have to be. Once you understand what’s involved, it’s just another business task to tick off—like BAS or payroll. And when you’ve got nothing to hide, you’ve got nothing to fear.

Keep your books clean, meet the deadlines, and work with someone who knows the ropes. That way, audits become a simple check, not a crisis.