We have just released (for the y/e 31/3/2020) two new templates for the completion of Real Estate Trust Compliance jobs.
This includes the following updates:
- Added checklist for 2008 Act (D3)
- Changing how materiality is assessed away from a quantitative style to descriptive as all breaches of the requirements of the legislation are considered material
- Changed how sampling works on testing pages so now the number of (say) receipts in the period is added, and a percentage of items is selected based on assessment of controls
- The addition of a new template specifically for Property Management*
- A review and update to the Internal controls checklist making more streamlined and easy to complete
- Review and update to the rest of the content to make more focussed and streamlined
* Trust accounts that deal solely with residential letting are not covered under the Real Estate Agents Act or Audit Regulations because residential property letting is excluded from the definition of real estate agency work (refer to section 4 of the Act).
(However Trust Accounts that deal with commercial property leasing are covered under the Act and Regulations.)
Some firms are opting to have their residential property management Trust Accounts audited. In this case auditors are not required to provide reporting to REA for these audits, however if an auditor discovers any irregularities while completing a trust account related to residential property letting, they must inform REA immediately. They do not need confirmation that a residential property letting trust account is being operated appropriately, but they do need to know if the opposite is true.
Where both real estate and residential property letting transactions occur within one trust account, auditors must provide an audit report based on their findings as they pertain to all transactions in the account.
(see REINZ for more information )
Swapping to the new templates
The swap to the appropriate new template should be done after rolling over the y/e 31/3/2019 work. Most of the content will carry across, however there are some changes to the new templates which will mean new work and removal of some (probably unnecessary) work from the prior year.