APES 310: Accounting Members and Client Monies

Identify the Role and Client-Money Arrangement

Identify whether you operate a member’s trust account or hold signing authority over the client’s own bank account. Both arrangements can bring client money within APES 310. Joint authority can count, even where you cannot release a payment alone.

The Accounting Professional & Ethical Standards Board’s APES 310 overview separates these arrangements and roles. A bank account’s name alone does not identify your responsibilities. Map the engagement to the actual authority held by you and your personnel.

The 2024 standard excludes preparing transactions for later client approval where you have no responsibility or authority to transact. It also excludes a trustee, attorney, director or other officeholder acting outside a client relationship. Those capacities carry their own obligations.

Record the distinction in practical terms. Preparing a proposed payment file for the client’s independent release is different from being able to co-authorise that release. Assess the actual banking permissions alongside the engagement terms. Broader trust accounts arrangements require their own account and authority analysis.

Establish Authority Before Receiving or Paying Money

Set out the client relationship, permitted transactions and account arrangements before dealing with the money. CPA Australia’s APES 310 guidance explains the duties to follow client instructions and separate client money from the member’s funds.

Build an authority file that answers the following questions.

• Who is the client, and who can instruct you for that client?
• Which account and transactions does the engagement cover?
• What approvals must accompany a payment?
• Who verifies a changed recipient account?
• Who takes over if the authorised member is unavailable?
• Who prepares the reconciliation and communicates with the client?

Keep bank terms with the engagement documents. Trust-account terms need particular attention to set-off and interest. The APESB standard contains a fallback where the bank cannot agree to the required terms, so resolve that issue before opening the account.

Use the bank’s authorised access arrangements. The standard prohibits using someone else’s electronic banking password. Written client instructions provide a record of the permitted action. Record an oral instruction when received, including who gave it and what it authorised.

A payment request still needs an authority check where it appears genuine. For example, an invoice forwarded by a client employee does not establish that the employee can approve it. Resolve the authority through the engagement and client mandate before release.

Maintain the Member’s Client-Money Record

Keep the authority, transaction record and bank evidence together so the handling of each client’s money can be followed. Chartered Accountants Australia and New Zealand’s client-monies guidance explains the need for adequate records and internal controls in both account arrangements.

Consider a fictional member’s trust account receiving $18,000 for Client A. The client authorises a $7,500 supplier payment. Assume no interest, bank charges or other movements during this example.

A Worked Client Balance

The remaining $10,500 belongs in Client A’s balance. An invoice from the member for $2,000 does not itself authorise a withdrawal. Obtain the client’s written approval before paying professional fees from either account arrangement.

If the bank instead shows a $7,800 supplier debit, record the $300 difference and investigate its source. Keep the original instruction and payment evidence. Correct the records through a traceable entry once the facts establish the cause. An unexplained difference needs assessment for any deficiency and reporting duties.

For trust accounts, reconcile at least every 25 business days and take action on differences within five business days. Client-bank-account reconciliation duties depend on who has that responsibility, with agreed timing possible under section 6. Keep that distinction in your procedures.

For a larger investigation into historic movements, FinTrace converts and analyses supplied statements into a searchable ledger and findings report. Source filename and page references give the accountant direct access to the supporting bank evidence. Maintain the client authority and reconciliation records alongside the statement analysis.

Separate the Auditor’s Appointment and Reporting

Appoint another member in public practice for the compliance assurance engagement. CPA Australia’s explanation of the assurance requirement describes the annual reasonable assurance engagement, completed within three months of the applicable year-end.

Limited assurance is permitted where the member need not maintain a trust account and can only co-authorise client-bank-account transactions with the client. Consider any legislative assurance coverage when defining the remaining scope. The separate trust account audit regimes do not supply a universal rule for accountants.

The auditor needs a public practice certificate from a relevant professional body. Assess independence under Part 4B of APES 110. The appointment process includes considering reasons to decline and seeking information from the existing auditor with permission. Apply the relevant auditing and assurance standards to the engagement and report.

Prepare an accessible file of account terms, authorities, client transaction records and reconciliations. Include unresolved differences and corrective action. Identify who can supply missing information and keep client-information release authorisations with the file.

Reporting a Compliance Concern

Paragraph 8.10 covers specified material failures, uncorrected bank-statement errors and circumstances where money has not been handled or maintained under the standard. The reporting triggers differ, so identify the relevant paragraph before calculating its deadline.

A corrected reconciliation does not erase the need to assess a reporting trigger. Record when the concern became known, the supporting records and the action taken. Give the auditor the same unresolved facts the member is addressing, and retain evidence of any required professional-body notification.