Spot Audit Program

Information on spot audits performed by The Law Society of Manitoba

The goal of the Audit Program is to ensure that client funds held “in trust” are properly safeguarded.  The Law Society of Manitoba has established Rules relating to Financial Accountability which require lawyers to handle clients’ trust funds appropriately and maintain up to date and accurate accounting records.  The Audit Department monitors compliance with these rules through the Spot Audit Program and the Annual Trust Account Report filings.

 

Spot Audits are conducted of every law firm in Manitoba having a trust account.  The majority of these audits are routine audits conducted on a rotational basis.  In addition to these regular audits, the Law Society auditors conduct two types of targeted audits:  new firm and priority audits.  A new firm audit, which is typically conducted within the first year of a member opening his or her trust account, is intended to be educational in nature.  The aim is to ensure that members have established proper accounting systems and understand all the requirements concerning trust funds.  Priority audits are conducted more frequently for firms having a history of trust related problems.  

 

Every law firm maintaining a trust account must file an Annual Trust Account Report. This provides the Law Society with up to date information concerning the member’s trust accounts and their accounting systems.  There are two types of Annual Trust Account Reports.  Most firms are provided the option of filing a Self report, which requires the member to complete a questionnaire and submit a month end trust reconciliation and supporting documentation.  However, a few members with previously inadequate accounting systems and/or unfavourable past audit results are required to file a Form D with an independent accountant’s review.

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