What is an External Examiner? 

An external examiner (EE) is a person who is qualified to be appointed to examine the trust records of a law practice or approved barristers’ clerk.

Who can be an External Examiner?

An EE must complete the Legal Services Council approved External Examiners trust course conducted by the Law Institute of Victoria or NSW Law Society as part of these qualification requirements, and be a member of an approved accounting body, such as CPA Australia. 

Appointing an External Examiner

If a law practice or barristers’ clerk holds a trust account, they must appoint an EE to examine the records of that trust account annually. The appointment gives the EE statutory powers to examine their trust records and report those findings.

A law practice or barristers’ clerk must notify the Board of the appointment of their EE using the notification of appointment of External Examiner form within a month of receiving trust money (other than transit money). New EEs filling out the form must provide a copy of their completed EE course certificate.

Please note that it is the responsibility of the law practice or barristers’ clerk, not the EE, to lodge the appointment form with the Board. 

Examine Period

§  For Victoria

• Law practices and approved barristers’ clerks who operate trust accounts are required to keep trust records. These records must be examined by an EE each trust examination year. The trust examination year runs from 1 April – 31 March.
• For the purposes of the examination, a law practice or approved clerk must provide the EE with their accounting or other records relating to the affairs of the practice or approved barristers' clerk, as well as any other information the EE reasonably requires. Penalties apply for failing to comply with these requirements. 
• EEs must provide end of trust year documentation to the Board by 31 May each year.
• EEs, law practices and approved barristers' clerks will be contacted directly to inform them of the end of trust examination year requirements. The trust examination year requirements via LSB Online open on Monday 4 April 2022.
• All parts of the annual trust examination reporting is conducted via LSB Online. Parts A and B are completed by the law practice. The External Examiner can then submit their report. 

§  For New South Wales

1.     A Law Practice Confirmation and Statement of Trust Money is required to be completed online by each law practice that operated in New South Wales during the period 1 April 2021 to 31 March 2022. 

2.     The due date for completed reports to be submitted online is 31 May 2022. 

3.     In relation to the calculation of Statutory Deposit, the Examiner is required to check that the quarterly calculations have been completed by the law practice. The Examiner is not required to calculate the amount held in the Statutory Deposit account but is to confirm that the practitioner is aware of their obligation. 

4.     Only the Part A of the Law Practice Confirmation and Statement of Trust Money is to be completed if the law practice did not receive trust money. 

5.     Only the Part A of the Law Practice Confirmation and Statement of Trust Money is to be completed if the law practice only: 

a.     Received or held trust money Subject to a Specific Power pursuant to the PEXA Settlement Scheme; 

b.     Received or held trust money Subject to a Written Direction; 

· Received or held Transit Money. 

6.     If the principal of the law practice confirms that trust money (other than PEXA power money, written direction money or transit money) was received or held during the period then Parts A and B of the Law Practice Confirmation and Statement of Trust Money are completed. The law practice then notifies the EE that the statements have been completed and the records are available for examination. 

7.     All EE Reports incorporating the Law Practice Confirmation and Statement of Trust Money are required to be lodged online via the Law Society of New South Wales website. Emails are sent to External Examiners and law practices providing information on the online lodgement process.

Chang Accounting Advisory Pty Ltd, we are CPA practice and external examiner for law practice’s trust account. If you or your families or friends need our services, please feel free to contact our team for any assistance. 

This article is for informational purposes only and does not form part of our advice. This article is based on Victorian Legal Services Board + Commissioner and The Law Society of New South Wales. Please contact our team if you need any assistance.

Claire Chang, 0497 131 419, claire.chang@changadvisory.com.au, wechat: clairechang26

Michelle Cui, 0433 539 870, michelle.cui@changadvisory.com.au, wechat: michellejc