APES 310: Dealing with Client Monies became effective 1 July 2011 with early adoption permitted replacing APS 10 Trust Accounts and Guidance Note 3: Operation of Trust Accounts.
The standard has been divided into two parts.
- Part A: Obligations of members who deal with client monies
- Part B: Obligations of trust account auditors on their compliance with this standard
Part A obligations include:
- general principles to be followed
- opening of trust accounts
- dealing with client monies in relation to holding, receiving and disbursement of client monies
- documentation
Audit of a member in public practice's compliance with APES 310
APES 310 extends annual audit requirements to client bank account to ensure strengthened safeguards for clients. Members in public practice need to ensure that their compliance with APES 310 is audited annually within three months of the applicable year end date for members who opened their trust account after 1 July 2011. Members with existing trust accounts prior to 1 July 2011 must comply with the audit requirements of APES 310 within three months of the applicable year end date which is 31 March each year.
The obligations under this section extend to more than just those members operating trust accounts. The standard applies where a member or any of the member's personnel can authorise the transaction of client monies which include:
- holding, receiving or disbursion of client monies
- being authorised to transact client monies
- any monies coming into control of the member
APES 310 definition of client monies include:
- cash
- foreign currency
- any negotiable instrument
- any security, the title to which is transferable by delivery (for example, bills of exchange and promissory notes), including delivery by electronic funds transfer
Part B specifies the obligations of what a trust account auditor must do when conducting an audit on a member who deals with client monies and also includes an example of an audit report for this type of engagement. Trust account auditors not only need to ensure compliance with APES 310 but also the relevant Standard on Assurance Engagement due to the compliance nature of this type of engagement.
CPA Australia has designed a new sample Client Monies Audit Engagement Letter (DOC) for engagements operating under APES 310 that members can use and adapt. Members are reminded to visit both the Accounting Professional and Ethical Standards Board website and Auditing and Assurance Standards Board website for comprehensive information.