Lawyers Trust Account Audit

An external examiner is an accountant approved by the Law Society or relevant legal services regulator to conduct the annual solicitor trust account audit on behalf of a law practice. Every solicitor who receives, holds, or disburses trust money must appoint an external examiner to review their trust account and confirm that trust funds have been managed in accordance with the Legal Profession Uniform Law and associated regulations.

As your external examiner, our role is to independently verify that your trust records are accurate, complete, and compliant — and to flag any trust account irregularity that may need to be reported to the Law Society or the regulator.

Practices sometimes assume a Law Society membership alone covers this obligation, but the Law Society does not itself conduct the examination — that role sits with an approved external examiner like Kennedy Tax and Business Services.

Trust Money and Trust Account Requirements

Trust money is any money a solicitor or law practice holds on behalf of a client, including funds held in statutory deposit accounts and controlled money accounts. Because trust money belongs to the client — not the practice — strict requirements govern how it must be received, recorded, and disbursed.

A solicitor trust account audit examines whether your firm’s handling of trust money satisfies these requirements, including:

• Timely and accurate recording of every trust money transaction
• Proper reconciliation of trust account balances each month
• Correct authorisation procedures for trust account withdrawals
• Compliance with the specific trust accounting obligations set out under the legal profession uniform law

Record Keeping Requirements for Law Practices

Sound record keeping is the foundation of every solicitor trust account audit. Regulators expect law practices to maintain trust account records that are current, reconciled, and readily available for examination. This includes trust ledgers, receipts, cheque butts, bank statements, and reconciliation reports.

Many firms use trust accounting software to manage these records, and we work confidently across several trust accounting software platforms commonly used in the legal profession. Whether your records are digital or paper-based, our audit process is designed to work with your existing systems rather than force a change of process during the trust examination year.

Our Solicitor Trust Account Audit Process

Our experience and knowledge of trust account practices ensures we can take the stress out of the audit process. As your dedicated external examiner, we provide clients with clear, practical guidance well in advance of audit deadlines, including:

• A guide to exactly what documentation and other evidence is needed
• Clear communication of audit requirements before the trust examination year closes
• Support working through your trust accounting software to extract the records we need
• A structured financial audit timeline that keeps you ahead of lodgement deadlines

Reporting to the Legal Services Board

Once our examination of your trust account is complete, we prepare the formal reporting required by the Victorian Legal Services Board + Commission. This audit report confirms whether your trust money has been handled in accordance with the legal profession uniform law, and discloses any trust account irregularity identified during the review. Where issues are found, we work with you to resolve them and support your ongoing trust accounting obligations going forward.

Why Choose Kennedy Tax and Business Services as Your External Examiner

Legal practitioners across Melbourne trust our team to manage their solicitor trust account audit accurately and on time. Beyond trust account audits, we also provide broader tax audit and business advisory services, so we understand the full financial picture of a law firm — not just its trust account.

Choosing an external examiner who understands both the legal profession and audit and reporting regulations gives your practice confidence that your solicitor trust accounts are in safe hands.

Get Started With Your Trust Account Audit

Think of us as your guide through the entire audit process, from first document request to final lodgement. Let our dedicated team assist you with your law trust account audits. Contact us today to arrange a consultation.