External examination: the records to have ready before the examiner starts

An external examination goes quickly when the examiner asks for a record and it is already in the folder. It drags when every request turns into a search. This is the external examination checklist turned into what that folder should hold.

It follows the Trust External Examiner Checklist 2026 the Law Society of NSW publishes for examiners. It lists records to have ready. It does not restate the rules behind them.

External examination checklist: start with the accounts

• Every account that held trust money in the year, including any opened or closed part way through. The examiner checks them against your Part B statement.
• The authorised signatories for each account across the year, including anyone added or removed.
• Bank statements for the full year for every account, with no gaps.
• Access to the accounting system, or printouts of what it produces, so nobody waits on one person's login.

Receipts and deposits

• Receipts in number order, with every cancelled receipt kept rather than deleted.
• On each receipt: the date, amount, form of payment, who paid, the client, the matter and the reason for the money.
• Deposit records for cash and cheques, with the date, the amount and the details of each cheque.
• For a direct deposit, the bank notification the receipt was made out from.

Payments and transfers

• The payments cash book: number, date, amount, payee, matter and reason for every cheque and transfer.
• For each electronic transfer, the name, BSB and account number the money went to.
• A trust journal for every transfer between ledgers, with its details filled in.
• For each withdrawal to pay your own costs, the bill, request for payment or authority behind it, and the date each was given.

Withdrawals for costs deserve their own tab. The examiner checks each one against the paperwork that came before it, and the dates are what they look at.

Ledgers and reconciliations

• The trust ledger for every matter and every person money was held for.
• Each month's reconciliation statements and trial balance, for each account.
• A note on every reconciling item still open at year end: what it is, and when it cleared.
• Any ledger that went into debit or showed a deficiency during the year, and how and when each was fixed.
• A listing of cheques still unpresented at the end of the trust year.
• A copy of any notice given to the Law Society about a trust account irregularity.
• Copies of the trust account statements sent to clients.

The other kinds of trust money

Each of these gets its own section in the checklist. If the practice handled none of one kind, tell the examiner at the start and that section takes a minute.

• Controlled money: the client's written direction to deposit, the controlled money register, and evidence a principal reviewed the listing.
• Transit money: the records of what came in and where it went.
• Money under a written direction: a copy of each direction.
• Money held under a power of attorney or as executor: the register of powers and estates.
• Investments for clients: the instructions to invest, and the register of investments.
• Statutory deposit: the calculation for each period and the bank document showing what is held.

Matter files

• A list of matters opened and closed during the year. The examiner samples across them, so a complete list saves a round of questions.
• The files for matters that touched trust money, where the examiner can pull any of them.
• Details of any money a solicitor or associate borrowed from a client or former client, if there is any.

If your trust records are kept in software

The checklist has a section of its own for computerised accounting systems. It adds four things to the folder.

1. Month end copies of the cash books, reconciliations, ledger balances and controlled money listings, in a form that cannot be edited.
2. The system's record of changes to client names, addresses, matter references and descriptions.
3. Evidence of a backup every month, and where the backups are kept.
4. Copies of any ledger deleted during the year.

Before the examiner starts

Send the account list and the signatories first, then ask which matters and months they want to sample. Check every account's bank statements cover the whole year before the examination begins. A gap found during it waits on the bank.