Thursday, April 25, 2013

PCLaw And LSUC Spot Audits

Prior to your LSUC Spot Audit, you will receive a letter outlining the period of the audit, typically from the audit date back 1 year - to the nearest month end. If you have them, you will be required to email a detailed list of Private Mortgages, and a detailed list of Power of Attorney and Estate matters. If you have a lot of these types of files, the auditor will advise you which files have been selected for auditing.

During the audit, you will be required to provide photocopies of bank statements, bank reconciliations, and Client Trust Listings – typically the most recent month and the prior December 31st. If you do electronic banking for any trust transactions, you will need to provide photocopies of the applicable Form 9 a, b, or c.

The auditor will usually have you run the Bank Journal report for a randomly selected month, and all of the matters with transactions appearing on this report will form the basis of the audit. All of the files and paperwork to support the transactions will be examined. If anything is unclear, you will need to be able to satisfy any of the auditor’s questions.

The Private Mortgage, Power of Attorney, and Estate files previously selected by the auditor will also be examined, even if they have no transactions in the randomly selected month.  The auditor will likely ask for additional PCLaw reports related to these matters.

The auditor will also want you to run Client Summary reports, selecting for general retainers and negative unbilled disbursements. These represent client funds on deposit in your general account, which is not allowed.  On audit day, these reports should show $0.00 balances.

As always, I invite your comments and suggestions for future post topics. Next Posting – PCLaw And LSUC Audits – Prepare Ahead.