Frequently Asked Questions

An external examiner is an independent qualified accountant or auditor approved by your state's Law Society to conduct annual audits of law firm trust accounts. They verify compliance with trust account regulations and ensure client funds are properly managed.

Yes, any law practice that receives or holds trust money must engage an external examiner for an annual audit, regardless of the volume or value. This applies across all Australian states and territories.

The external examination period is April 1 to March 31 each year, and the report must be submitted by May 31 each year. Missing this deadline is a serious compliance breach that can result in penalties or disciplinary action.

Costs vary by firm size and complexity. Most law firms typically pay $1,500 - $3,500 for their annual external examination. Factors include transaction volume, practice complexity, and location.

Typically 1-2 weeks for small firms, 2-3 weeks for medium firms, and 3-6 weeks for large or multi-office practices. The timeline depends on how well-prepared your records are and the examiner's workload during peak season (September-October).

Yes, you can use the same external examiner year after year. Many firms find this beneficial for consistency and relationship building. However, it's good practice to periodically review whether your examiner still meets your needs (every 5-7 years).

Yes! Many external examiners now offer remote examinations, especially if your practice uses cloud-based software. Remote audits can be more efficient, cost-effective, and less disruptive to your daily operations.

For minor issues, examiners typically provide recommendations in a management letter and may allow time to rectify before finalizing the report. Serious breaches must be reported to your Law Society. Good examiners work collaboratively to resolve issues. Most compliance problems can be fixed with improved procedures.

External examiners are specifically approved by Law Societies to audit trust accounts and must meet strict independence and qualification requirements. Your regular accountant can only be your external examiner if they're approved by your state's Law Society and don't provide bookkeeping services to your firm.

Complete your June 30 reconciliation by July 15, organize all trust account documents (bank statements, ledgers, reconciliations), ensure all records are up-to-date, and have sample client files ready. Good preparation reduces audit time and costs. Book your examiner early (July-August) to avoid the busy season rush.