The yearly trust account audit: who checks a Queensland agency

In this article

Written by

Kooky

Builder of Shaka, the payment router that pays every agent their commission on closing date.

About Kooky and Shaka →

A deposit on a house, a fortnight's rent, a bond on its way to the bond authority: for a few days or a few months, that money sits in an agency's trust account. It belongs to the client, not to the agency. Queensland law does not simply ask agencies to look after it. It requires an outside accountant to come in every year, test the books, turn up twice without warning, and sign a report that goes to the regulator.

This guide follows that audit through a full year: who may do it, when it falls, what the auditor looks at, what must be reported, and what the Office of Fair Trading does when a report is late or the auditor cannot give a clean result. It also covers the agency that holds no trust money and the agency that sells up or closes its account.

The rules come from the Agents Financial Administration Act 2014 and the Agents Financial Administration Regulation 2014, read in their current versions on the Queensland legislation website. Throughout the Act, the "chief executive" is the head of the department that contains the Office of Fair Trading; in practice, notices and reports go to that office.

Agents Financial Administration Act 2014, sections 35 and 36; 200 penalty units at the Queensland penalty unit value of $172.70 from 1 July 2026.

Opening the account and telling the regulator

Only a principal agent may open a trust account. Section 9 of the Act makes it an offence for anyone else to open an account that claims to be one. A principal agent is, broadly, the licensee who carries on the business on their own behalf: the Act's own example says a licensee stops being a principal agent when they stop carrying on business under their licence on their own behalf.

Three more rules apply on the day. Under section 11, the account must be opened at an office or branch of an approved financial institution in Queensland, and the institution must be given a copy of the agent's licence. Under section 12, the name of a general trust account must include the words "trust account". And under section 13, the agent must tell the chief executive in writing that the account exists.

That notice is due within two months of the account being opened. It states whether the account is a general or a special trust account, the financial institution, the account name, the BSB and the account number. The same section, and the same two months, apply when an account is renamed and when it is closed.

Who may be the auditor

Section 29 of the Act sets out who counts as an auditor. There are four routes:

• a person registered as an auditor under the Corporations Act;
• a member of CPA Australia entitled to use the letters CPA or FCPA;
• a member of Chartered Accountants Australia and New Zealand entitled to use CA or FCA;
• a member of the Institute of Public Accountants entitled to use MIPA or FIPA.

The appointment has two deadlines of its own, both in section 30. The agent must appoint an auditor within one month after opening a trust account. Then, within one month after the appointment, the agent must give the chief executive written notice of the auditor's name and address, with evidence that the auditor has accepted. The first step carries a maximum penalty of 200 penalty units or one year's imprisonment; the notice, 200 penalty units.

Changing auditors is also watched. Under section 31, if an auditor resigns or the agent ends the appointment, both the auditor and the agent must immediately tell the chief executive what happened and why. The agent then has one month to appoint a replacement and give notice of it. If an auditor dies, the agent must tell the chief executive as soon as practicable and appoint a new auditor within a month of learning of the death.

Section 32 also lets the chief executive report an auditor to the Australian Securities and Investments Commission or to the auditor's accounting body.

The audit month and the four-month deadline

Agencies do not all report at the same time of year. Each licensee has its own "audit month", defined in section 33 of the Act as the eighth month after the month in which the licence was first issued, and the same month in every later year. The chief executive may set a different month by written notice. The Act gives its own example: a licence first issued in January has September as its audit month.

The "audit period" is the 12 months ending on the last day of the audit month, unless the chief executive decides on another period. The report is then due, under section 35, within four months after the last day of the audit month.

Taking the Act's example one step further: a licence first issued in January has an audit period that runs from 1 October to 30 September, and a report that must be filed by 31 January. The Act requires the agent to file the auditor's signed original report with the chief executive.

In an article for the REIQ in March 2020, the Office of Fair Trading's then executive director noted that auditors often lodge the report on the agent's behalf, and that online lodgement had been added for audit reports, with an automatic receipt. The agent, he wrote, remains responsible for the report arriving on time.

An extension is possible. Section 35 lets the chief executive extend the time if the agent or the auditor applies in writing and states the grounds. The 2020 article warned that a request made after the deadline has passed will generally not be considered.

Section 35 adds that if an agent is charged with failing to file, it does not matter that the failure happened without the agent's authority or against the agent's instructions.

Two visits nobody is told about

An audit done only at year end would see the books on their best day. So the Act adds surprise. Under section 36, the auditor must make unannounced examinations of the trust accounts during the audit period: two if the agent was an agent for the whole period, and one if the agent was an agent for more than six months but less than the whole period.

The Act also spaces them. An unannounced examination must not be made within two months after the last day of an audit period, or within two months of another unannounced examination.

The agency does not choose the day. The day and the result of each examination must appear in the yearly report.

What the auditor tests

The Regulation tells an agency what records to keep, and section 3 says they must be kept in a way that lets them be properly audited. The Act then lists, in section 40, what the audit report must say. Read together, they give the auditor's work plan; how the records themselves are kept is covered in the magazine's guides on record keeping and agency software.

Receipts. Trust receipt forms are numbered consecutively and kept in a register. The Regulation requires a receipt to be completed immediately when trust money is received, or, for a direct deposit or electronic transfer, on the day the agent becomes aware of it. The audit report must list the serial numbers of the receipts used in the period and of the unused receipts produced to the auditor.

Timing of banking. Section 16 of the Act requires trust money to be paid into the general trust account before the end of the first business day after it is received. The auditor compares the date on each receipt with the date on the bank statement.

The cash book and the ledgers. Receipts and payments must be entered in the trust account cash book within two business days, and each entry posted to the right ledger within two business days. There must be a separate ledger account for every person the agency holds money for. The report must give details of any trust ledger that was overdrawn, and of any time the trust account itself was overdrawn.

Monthly reconciliations. Within five business days after the end of each month, the agent must do two reconciliations: the cash book balance against the total of the client ledgers, and the bank statement balance against the cash book. The year-end bank reconciliation is attached to the report itself, with the details the Regulation prescribes: the statement balance, trust money on hand, outstanding deposits, electronic deposits not yet recorded, outstanding cheques and the cash book balance.

Authority for withdrawals. Section 21 says trust money stays in the account until it is paid out as the Act permits. For each payment the auditor looks for the paper behind it. For a cheque, the Regulation requires a record of the date, the payee, the client and the matter. For an electronic transfer, the agency must keep a transaction report from the financial institution showing the date, the amount and the payee.

Drawing commission. Under section 22, an agent may take its fee from trust only against the money held for that transaction, and only when authorised. Expenses may be paid as they fall due. The fee comes later: once the transaction is finalised, the agent first pays the client what the client is owed, then draws its own fee. The Act gives settlement of a sale contract, or its termination, as examples of finalisation.

Old balances. The report must list amounts that had been held for more than three months at the end of the period, say why, and say whether they have since been paid out. Section 22 sets the normal rhythm: the balance of a finalised transaction is paid within 14 days of a written request, or within 42 days of finalisation if nobody asks.

The report also records the name and version of any accounting software used, and anything else the auditor thinks should be reported. If the auditor needs to see the agency's general business account to judge whether the trust account has been kept properly, section 38 lets the auditor ask for it.

When the auditor has to speak up

Under section 37, an auditor must immediately give the chief executive written notice in two situations. The first is when the auditor cannot report that a trust account has been satisfactorily kept under the Act. The second is when, on an unannounced examination, the auditor finds what the section calls an irregularity that ought to be brought to the chief executive's notice. An auditor who stays silent commits an offence with a maximum penalty of 200 penalty units or one year's imprisonment. The same applies under section 38 if an agent refuses to produce other accounts the auditor has asked for.

A report that does not give the account a clean result is often called a qualified report. The Act does not use that phrase; it speaks of whether each account was "satisfactorily kept". A qualification is not itself an offence. What it does is put the detail in front of the Office of Fair Trading.

The auditor is chosen and paid by the agency, but the duty to report a problem runs straight to the regulator.

What a late or missing report costs

Penalties in Queensland Acts are written in penalty units, and the dollar value of a unit changes most years. From 1 July 2026 it is $172.70, set by the Penalties and Sentences (Penalty Unit Value) Amendment Regulation 2026, as the Queensland Law Society's journal Proctor reported. The figures below multiply the Act's maximums by that value. They are ceilings for a court, not the usual result.

Published outcomes show where real cases tend to land. In a case reported by the trade publication Real Estate Business on 1 March 2022, a far north Queensland property management company lodged its 2021 report about a month late: it was due in August and arrived in September. The company had already received infringement notices for the same thing in 2019 and 2020. In the Cairns Magistrates Court the company was fined $5,000 and its principal $1,500, a total of $6,500. The Commissioner for Fair Trading at the time, Victoria Thomson, was quoted as saying: "Trust money is not the agent's money, so the right to have a trust account comes with responsibilities."

A missing report can also be the first outward sign of a deeper problem. In a matter the Department of Justice reported on 12 June 2025, the Office of Fair Trading began investigating an agency south of Brisbane after it failed to lodge its annual audit report. A receiver was appointed, found a shortfall and reported that 26 people were owed money. The Beenleigh Magistrates Court imposed a $20,000 fine and a ten-year disqualification from holding a licence, on charges that included false entries in the trust records and one count of failing to lodge the audit report. The department said more than $69,000 was paid from the claim fund to those who had lost money.

Fines are not the only lever. Under section 76 of the Property Occupations Act 2014, the chief executive may immediately suspend a licence when a licensee has failed to file an audit report as required, or when the chief executive reasonably considers that an irregularity or deficiency exists in a trust account.

Receivers and special investigators

Beyond fines, the Act gives the chief executive three tools.

The first is a direction over the account itself. Under section 42, if the chief executive reasonably believes trust money has or may have been stolen, misappropriated or misapplied, or the agent has abandoned the business, the chief executive may direct that nothing be drawn from the account without written approval, or that it operate only on stated conditions.

The second is a special investigator. Under section 70, the chief executive may appoint one when of the view that a trust account has not been kept as the Act requires. The investigator's functions under section 71 include inspecting the accounts and reconstructing incomplete records. An investigator who finds grounds for a receiver must report them immediately.

The third is a receiver, under section 47. The ground here is graver: a reasonable belief that a defalcation, meaning a misuse of trust money, has or may have been committed. Unless the agent consents, the agent is first invited to show cause, with at least 21 days to respond. A receiver may also be appointed at once when clients cannot get their money because the agent has died, become infirm or abandoned the business, or because the licence has been suspended, cancelled or has expired. The receiver takes possession of the trust property, works out who is owed what, pays out what the property can cover and reports to the chief executive.

The audit and licence renewal

Under section 58 of the Property Occupations Act 2014, an application to renew a licence must be accompanied by one of two things: an audit report for all trust accounts kept by the licensee during the relevant audit period, or a statutory declaration that the licensee did not operate a trust account during that period. The relevant period is the audit period that ended immediately before the licence's expiry date. Section 61 applies the same requirement to an application to restore a licence that has expired, which must be made within three months of expiry.

In practice an agency with an overdue report meets the problem again at renewal. The Office of Fair Trading's 2020 article said as much: a late audit report can delay the renewal of a licence.

Agencies that hold no trust money

Some principal agents hold a trust account that sits unused. Section 34 requires an audit for each audit period in which the agent carried on business and operated a trust account. No audit is needed for a period if the agent gives the chief executive a statutory declaration that the agent did not operate a trust account during that period.

Two points follow. An account that exists but was never used still needs something filed: the declaration takes the place of the report, it does not arise by itself. And a statutory declaration is a formal statement with legal consequences if it is untrue. An account through which even one deposit passed during the period was operated, and needs an audit.

Selling the rent roll or closing the account

Two provisions cover the way out. The first is section 39 of the Act. An agent who keeps a trust account and stops being a principal agent must, within two months, have the trust accounts audited and file the signed original report. That is half the time allowed for a normal year. This final audit covers the stretch from the day after the last audited period ended to the day the agent stopped being a principal agent. If the account has never been audited, it runs from the day the agent first had to keep trust accounts. The maximum penalty is the same as for the yearly report: 200 penalty units or two years' imprisonment.

The second is section 23 of the Regulation, which matters most when a rent roll or a whole agency changes hands. When a business is disposed of, or a partnership is formed or changes its members, the trust money stays with the original agent until the auditor doing the final audit certifies that it has been properly accounted for and reconciled. It may move earlier only in limited cases, the main one being that the client the money is held for authorises the transfer in writing. The final audit is therefore part of the sale timetable. How rent rolls are valued and traded is the subject of a separate guide.

An agency that sells its rent roll but keeps trading in sales remains a principal agent. Its ordinary audit year carries on, and the next report covers whatever passed through the account, including the money that left with the sale.

Closing the account is the last step. Under section 13, the agent gives the chief executive written notice within two months of closing it, with the same details given at the opening. The records then stay on the shelf: the Regulation requires them to be kept for at least five years.

Kooky, from Shaka

Kooky edits Queensland Estate and builds Shaka, the payment router he made for Queensland property professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.

About Kooky and Shaka →