Completing an external examination
Changes to how you can conduct an external examination audit under COVID-19 restrictions
Given the current government emphasis on working from home wherever possible, we have revised the process for conducting an external examination audit as follows:
- You should be doing examinations virtually given the current government emphasis on social distancing.
- You should obtain records via secure email to complete the audit as best you can.
- These alternate arrangements will apply to this examination period only.
- That we anticipate there may be a small number of practices that cannot accommodate a virtual examination (as they have paper based systems), we will need to look at those on a case by case basis. You should contact us on firstname.lastname@example.org if this situation arises.
External examination FAQs
External examination requirements
Law practices and approved barristers’ clerks who operate trust accounts are required to keep trust records. These records must be examined by an external examiner (EE) each trust examination year. The trust examination year runs from 1 April – 31 March.
For the purposes of the examination, a law practice or approved clerk must provide the EE with their accounting or other records relating to the affairs of the practice or approved clerk, as well as any other information the EE reasonably requires. Penalties apply for failing to comply with these requirements.
EEs must provide end of trust year documentation to the Board by 31 May each year.
EEs, law practices and approved clerks will be contacted directly to inform them of the end of trust examination year requirements. The trust examination year requirements through LSB Online open on Tuesday 2 April 2020.
Resources for External Examiners
The Board has produced several resources to assist External Examiners when completing an external examination.
Visit the Resources for External Examiners page for frequently asked questions and a video presentation about completing external examinations.
Examination on ceasing to be authorised to receive trust money
Law practices and approved clerks who cease to be authorised to receive trust money must also have their trust records examined by an EE for any part of the trust examination year in which they were authorised to receive trust money. Law practices or approved clerks must also lodge examination reports for each trust examination year and any remaining period during which they continue to hold trust money. These reports must be lodged with the Board within 60 days after the end of the relevant examination period (See Rule 68(4) of the Legal Profession Uniform General Rules 2015).
The Act imposes heavy penalties for failing to comply with this requirement.
Approved trust accounting software
There are several trust accounting software packages available on the market. Before purchasing one of them, make sure it has the capacity to comply with the law.
A list of trust accounting software packages that have been examined and certified by the Trust Accounts Department of the NSW Law Society can be found on their website.