Spot Audits Revealing Financial Deficiencies in Trust Accounting
The Professional Development and Competence Committee have reported a re-focus of how and who they are spot auditing. Sole practitioners and two lawyer firms running a real estate practice should be on alert. These Law firm demographics have been recognized by the PDCC as "posing the documented highest risk to the public". It is now established that the mandate is for these firms be Spot Audited every 5 years. The "lower risk" sole practitioner and small firms (2-5 Attorneys) will move to 7 year intervals. Mid-large sized law firms every 10 years.
Each Spot Audit is reviewed by a Supervisor. "The majority of audit engagements are found to have...insignificant financial deficiencies. An astonishing "35%" are escalated and require monitoring. Attorneys in the "highest risk" should take heed. Being on the radar of the LSUC Spot Audit program may, "warrant a re-audit in nine to 12 months". Escalations to Forensic Investigators and freezing of trust accounts can devastate a law practice and the effect is immediate on a real estate practice.
Take the time to review the Professional Development and Competence Committee Report. If you have concerns and need a review of your books and records contact Accounting for Law www.forlaw.ca/. Our seasoned experts can assess and put you on the correct path to LSUC by-law compliance.