Control of Trust Accounts | My Assignment Tutor

2. ASSESSMENT CPPREP4005 Version 1.0 25 March 2020 Page 12 of 19DOCUMENT LOCATION: Sharepoint/NSW/CPP41419/CPPREP4005Project 2 – Control of Trust AccountsIn this section you will demonstrate your skills and knowledge in relation to:• The roles and responsibilities of staff in relation trust account activities• Your own scope and limitations of your role for trust account activities• The responsibilities of the licensee-in-charge in relation to trust accounts and audit• The impact on clients/customers and the agency of inaccuracies in the trust account and trust accountfraud.a. Trust Account Roles and Responsibilitiesi. Review the following Trust Account transactions and refer to your office’s Policies and Procedures ( or thePolicies and Procedures contained in the LMS) and note down who within your agency has responsibility toexecute the transactions and what authority they require to initiate the transaction. TRANSACTIONAuthorising STAFF MemberAuthorityPayment of monthlycommission and feesPayment for repairs tomanaged propertyPre-paid auction expensesAgency sales commissionRelease of depositASSESSOR USE ONLYSNS ii. You are to investigate the Policies and Procedures regarding trust accounts in your office and report in yourown on the following: –ii.i. What are the procedures staff must follow when trust monies are received?ii.ii. The banking of trust moniesii.iii. What documentation is required by the authorising party in order for them to proceed withauthorisation?ii.iv. When does the licensee in charge undertake reconciliations in your organisation? How often dothese occur and how do these reconciliations ensure compliance with legislative requirements?ii.v. Who is responsible in the office for ensuring trust account records are accurate and up to date?ii.vi. How would discrepancies be identified and promptly managed in your agency? Who must thesebe reported to?i. Receipt of trust monies2. ASSESSMENT CPPREP4005 Version 1.0 25 March 2020 Page 13 of 19DOCUMENT LOCATION: Sharepoint/NSW/CPP41419/CPPREP4005 ii. Banking of trust moniesiii. Documentation for authorisation of payments out of the trust accountiv. Monthly reconciliation of the trust accountv. Supervisionvi. Identifying discrepanciesASSESSOR USE ONLYSNS b. Scope and limitations of your own role in trust account transactionsYou are working in a real estate office in either the sales department or the property managementdepartment (you choose which one).• If you are working in the sales department assume that you have negotiated a sale. The buyer comesinto the office and wishes to pay the 10% deposit. Refer to the relevant legislation and your agency’sPolicies and Procedures and explain what you must do in relation to the deposit and what is the limitof your responsibilities.OR• If you are working in the Property Management department assume that a tradesperson has comeinto the office with an invoice of work he had been ordered to undertake and seeks immediatepayment in cash. Refer to the relevant legislation and your agency’s Policies and Procedures andexplain what you must do in relation to the invoice. Also note whether or not you can pay thetradesman in cash.2. ASSESSMENT CPPREP4005 Version 1.0 25 March 2020 Page 14 of 19DOCUMENT LOCATION: Sharepoint/NSW/CPP41419/CPPREP4005 ASSESSOR USE ONLYSNS c. Licensee- in-Charge Responsibilitiesi. Report on what other responsibilities that the licensee-in-charge has in relation to trust accounts ASSESSOR USE ONLYSNS 2. ASSESSMENT CPPREP4005 Version 1.0 25 March 2020 Page 15 of 19DOCUMENT LOCATION: Sharepoint/NSW/CPP41419/CPPREP4005ii. In your own words explain why you think it is prudent for licensees-in-charge to conduct internal auditsof the trust account on a regular basis. In your answer cover the role of the yearly external audit andexplain how the purpose of that audit is different for periodical internal audits. ASSESSOR USE ONLYSNS d. Impact of Fraud and InaccuraciesIn your own words explain what the impact would be, on clients and the agency, of failure to correctinaccuracies in a trust account or to have systems in place to prevent fraud ASSESSOR USE ONLYSNS

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