Maintenance and Monitoring of Trust Account Efficiently †Free Samples

Question: Discuss about the Maintenance and Monitoring of Trust Account. Answer: The paper has been developed to discuss the arrangements for maintain and monitor the trust accounts efficiently. The firm must maintain an individual separate trust account different from the client funds so that the funds cannot be comingled with other funds (Reis 2015). In order to maintain and monitor the trust account the firm need to focus on several major requirements, which are mentioned below Developing the trust agreement Providing identification to a company as a trustee Developing appropriate paperwork and funding Development of personal trust The disbursement from the trust account can only be conducted through two distinct processes, which are mentioned below: Conditional delivery to an agent Disbursing against provisionally credited funds. This particular process is directed in compliance with the Good Funds Settlement Act. In order to maintain the security of trust account there are several practices undertaken by all financial institutions throughout the world. First of all the trust account must be held an authorized bank exclusive from generic account (Smith 2014). All of the receivers of trust funds must hold a Practicing Certificate. The high amount of trust finds transaction is conducted through definite legal practice and thorough investigation in order to prevent theft as well as fraud. The funds of the trust must be accessed or the negotiation related to the trust account must be conducted by the person who has been delegated with the signing authority from the client (Penner 2016). In order to monitor and supervise the activities of the employee related to the trust account, the recordkeeping plays a significant part. The firm maintains a strict record of every transaction activities regarding the trust account (May 2016). In addition to that, the employees are bound to report regarding every transaction to the commissioner of the firm. This way the activities of employees regarding the trust accounts are closely monitored. The record keeping must be maintained two different documents, which are general register and clients subsidiary ledger (Reis 2015). The record keeping must fulfill several necessary requirements, which are mentioned below: Each deposit and disbursement must be recorded The balance of clients fund must not be negative Any clients funds cannot be used to fulfill obligation another client Monthly reconciliation must be conducted of this subsidiary ledgers The agent must notify the details of discrepancy to the commissioner, police as well as franchisor. Conducting a special audit for investigating the source is most important damage control activity (Smith 2014). The agent must replace the misappropriated amount if possible. The firm needs to reconcile and report the arrangements as well as checks made by the trust account in a monthly basis. References May, G., 2016. From the conduct commissioner: You need to have a trust account. Bulletin (Law Society of South Australia), 38(2), p.27. Penner, J.E., 2016. Falsifying the Trust Account and Compensatory Equitable Compensation. Reis, R., 2015. Best practice: Payment of legal costs from the trust account. Ethos: Official Publication of the Law Society of the Australian Capital Territory, (237), p.10. Smith, D.H., 2014. Client Trust Account Fraud: Analyzing State, Federal, and International Rules and Regulations While Developing Effective Solutions for Prevention.