Yesterday, Convocation approved changes to By-law 9 and the Rules of Professional Conduct, as follows:
“By-Law 9 and rules of conduct amended re: trust account requirements
Convocation amended By-Law 9 (Financial Transactions and Records) and subrule 2.02(5)of the Rules of Professional Conduct to implement Convocation’s decision in February 2011 regarding trust account requirements. The rule amendments emphasize that a trust account must not be used for purposes outside the provision of legal services. The By-Law amendments introduce a requirement for licensees to record the purpose for which they are receiving or withdrawing funds from a trust account.”
Convocation amended By-Law 9 (Financial Transactions and Records) and subrule 2.02(5)of the Rules of Professional Conduct to implement Convocation’s decision in February 2011 regarding trust account requirements. The rule amendments emphasize that a trust account must not be used for purposes outside the provision of legal services. The By-Law amendments introduce a requirement for licensees to record the purpose for which they are receiving or withdrawing funds from a trust account.”
More detailed information can be found here:
Or paste in browser: http://www.lsuc.on.ca/WorkArea/DownloadAsset.aspx?id=2147484618
What does this mean for bookkeepers. You will need to be more descriptive on the trust receipts and disbursements entries. From now on, generic client disbursement entries must be replaced with entries that clearly defined the purpose of these trust transactions.
As always, I invite your comments and suggestions for future post topics. Next week – Pre-bills.
Clyde
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