Last time I gave an overview of what to expect on during the LSUC Spot Audit. What can you do to prepare ahead of time?
In addition to the required banking photocopies (typically the most recent month and the prior December 31st), have the rest of the audit period (1year) ready for photocopying. For each month, have your bank statement, together with your trust bank reconciliation, client trust listing, and your trust bank journal. Keeping these copies together is always good practice, but whichever month the auditor selects at random, you are ready to begin photocopying.
Review each bank statement during the audit period. Make sure you have completed the applicable Form 9 a, b, or c, if you do electronic banking for trust transactions. Add a copy of each to the pile of monthly banking records you have just prepared.
You will need to provide a Client Trust Listing as at the audit date, with detailed explanations for all inactive trust ledger account balances. If you have inactive matters, prepare your answers ahead of time.
Have photocopies prepared of your most recent Levy filing and your most recent 4 months of Teranet reports.
Prior to the audit, run the Client Summary, selecting for general retainers and negative unbilled disbursements. If matters are listed on the reports, transfer the funds to trust. Keep a copy of the report and your deposit slip to show the auditor.
Private Mortgage matters – for the files the auditor has selected, have copies of:
Registered Mortgage and any Assignments
Abstract/Search confirming ownership and mortgage priority (if the title search is a lengthy registry search, please contact the auditor for direction)
Any client ledger(s) where funds have been transferred to or from the mortgage ledger
Registered Discharge (if applicable)
Power of Attorney and Estate matters – for the files selected by the auditor, have copies of:
- The Will and any Codicils
- Certificate of Appointment of Estate Trustee
- List of Original Assets
- Client Trust Ledger or Equivalent Record Keeping
- Support for Current Value of Assets (investment statements etc.)
- Billings for Executor Compensation and/or Legal Fees
- Calculation for Executor Compensation Claimed and/or paid
As always, I invite your comments and suggestions for future post topics. Next Posting – Post-dated Cheques And Monthly entries in PClaw.