The Audit Program
Information About the Audit Program
Designed as a pro-active compliance measurement, audits measure the integrity of law firm financial record-keeping requirements. A primary goal of the audit is to provide on-site guidance to help law firms correct minor deficiencies with record-keeping practices before the deficiencies lead to serious noncompliance.
When a firm is selected, the auditor will telephone the firm to set a date and time. Then a letter will be faxed and mailed to the firm to confirm the date and time.
Normally, the Law Society anticipates that a firm will be provided approximately two-week’s advance notice of an audit. By pre-arranging appointments in this way, the audit program is less intrusive than unscheduled visits. Experience at other law societies indicates that advance notice does not compromise the information gathered during an audit.
While the two-week advance notice is designed to accommodate a law firm’s work schedule, the Law Society must balance a firm’s preferences with the Society’s public protection mandate. For this reason, and even allowing for some accommodation by the auditor, an audit schedule once established has limited margins for negotiation. If an audit appointment is delayed, or subsequently cancelled by a firm, the auditor has discretion to require a faxed copy of the firm’s most recent trust reconciliation. Failure to cooperate with the auditor about scheduling can result in an unannounced visit, and required compliance.
Following completion of an audit, the Law Society auditor will provide the firm with a document called Audit Report to Member, and will meet with the firm’s lawyers or accounting staff for discussion. The auditor will ask a firm representative to initial any area of concern noted on the Audit Report to verify that deficiencies and remedies were discussed. The auditor may require a firm to provide additional information directly to the Law Society to verify correction of the deficiencies identified in the Audit Report.
The Audit Report, when completed, will be submitted by the auditor to the Law Society for review and analysis and then, where considered appropriate, to the Law Society’s Executive Director for direction.
Review of Reports
The Executive Director has authority to do one of the following when an Audit Report is submitted for direction:
- close the file if there are no deficiencies noted or if deficiencies are minor and have been addressed in the Audit Report;
- send a follow-up letter requiring further documentation, or proof that the deficiencies identified in the Audit Report – such as trust reconciliations or discharges of mortgages – have been completed to the Society’s satisfaction;
- schedule a re-audit, if the deficiencies are serious enough to warrant further review to ensure remedy;
- require a firm to provide an undertaking setting out obligations and time-lines to remedy deficiencies identified during the audit and to avoid more formal proceedings;
- suspend the lawyer for failure to comply with an order given by the Executive Director re: above;
- refer the firm for a formal investigation, if the Audit Report indicates possible professional misconduct;