BSBCNV506 - Establish and Manage Trust Account - NBiA Assignment

This student assignment addresses the core aspects of establishing and managing a trust account, adhering to the requirements of the BSBCNV506 unit from the National Business Institute of Australia (NBiA). The assignment delves into various facets, including compliance with legislative requirements, the establishment and management of trust accounts, maintenance of transaction records, and monitoring and review processes. It covers crucial elements such as documentation, policies and procedures, the role of third-party auditors, and the use of computerized and manual accounting systems. The assignment also explores the significance of source documents, accounting errors, and the importance of trust in business operations. It further examines the fiduciary relationship, the creation and winding up of trusts, and the advantages and disadvantages of electronic versus manual transactions. The student provides detailed answers to questions covering a wide range of topics related to trust account management, providing a comprehensive understanding of the subject matter.

Running head: ESTABLISH AND MANAGE TRUST ACCOUNT
ESTABLISH AND MANAGE TRUST ACCOUNT
Name of the student:
Name of the university:
Author Note:

1ESTABLISH AND MANAGE TRUST ACCOUNT
Table of Contents
Answer to Question 1.................................................................................................................3
Answer to Question 2.................................................................................................................3
Answer to Question 3.................................................................................................................4
Answer to Question 4.................................................................................................................4
Answer to Question 5.................................................................................................................4
Answer to Question 6.................................................................................................................5
Answer to Question 7.................................................................................................................5
Answer to Question 8.................................................................................................................6
Answer to Question 9.................................................................................................................6
Answer to Question 10...............................................................................................................7
Answer to Question 11...............................................................................................................8
Answer to Question 12...............................................................................................................8
Answer to Question 13...............................................................................................................9
Answer to Question 14...............................................................................................................9
Answer to Question 15.............................................................................................................10
Answer to Question 16.............................................................................................................10
Answer to Question 17.............................................................................................................10
Answer to Question 18.............................................................................................................11
Answer to Question 19.............................................................................................................11
Answer to Question 20.............................................................................................................11

2ESTABLISH AND MANAGE TRUST ACCOUNT
Answer to Question 21.............................................................................................................12
Answer to Question 22.............................................................................................................12
Answer to Question 23.............................................................................................................12
Answer to Question 24.............................................................................................................12

3ESTABLISH AND MANAGE TRUST ACCOUNT
Answer to Question 1
The documentation are reviewed based on the legislative requirements and the
compliances of all the documents needed to be addressed in the form of the maintaining the
file notes, channels, communication procedures, authentication of the record payments and
many more. Further the authorization of disbursements and payments is a main components
in the trust accounts and must be addressed and updated by the organization.
Documentation regarding the trust records and transactions must be produced in order
to provide accuracy in the transactions related practices of the clients. The completion of the
transaction only happens when there is proper authorization regarding the documentation and
the legislative requirements. The completion of the transaction only happens when there is
impeccable documentation and authorization (Boulware et al.2016).
Answer to Question 2
Policies and procedures in the organization which must be adopted in order to ensure
that the requirement are met as per the requirements of the compliances. The policies of an
organization must be developed and must comply with the requirements of trust accounts.
The significant principles of the financial and accounting management must be identified as
per the legislative requirements.
The policies and the procedures of the organization of the company must be
confirmed through the process of the international accounting standards and deals with the
continuous compliance monitoring and internal auditing process. As per the internal audit of
the firm, the element which must be included in the audit work is that safeguarding assets,
checking the accuracy in the financial data, promoting the efficiency, ensuring that all the
records are reflective in nature and further ensuring that the policies and procedures regarding
the same is followed (Butler, Giuliano and Guiso 2016).

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Answer to Question 3
The third party who will be appointed in the organization is the third party auditor
who checks the books of accounts of the company. The recommendations in this case is to
help out the clients with the glitches which existed in the internal management system of the
company. The points needed to be taken care by the upper level management of the company
and necessary recommendation must be made (Yang et al. 2016).
The internal auditor is appointed by the third party who adopts the systematic,
disciplined approach in order to evaluate and further enhance the effectiveness of the control,
risk management and the governance process. The duty of the third party auditors is to
protect against the frauds and the thefts which takes place within an organization.
Answer to Question 4
The accounting system which is used by the organization is the computerized
accounting system which is related to the name of the clients, addresses, references,
description and many more of the clients. The data are maintained in the ledgers account
number of the company. The another accounting system which is used in this case is manual
trust accounting system which is required for the purpose of the administrative systems,
bookkeeping purposes, reporting and disclosure requirements, ethical requirements and many
more. The manual trust accounting system is required in order to ensure compliance with all
trust accounts requirements. Electronic trust accounting system is another accounting system
which is used by the organization and the reason behind that it is cost effective, help to
provide fast services and also helps to reduce the time of the work (Cassar, Healy and Von
Kessler 2017).

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Answer to Question 5
Source documents contain the original records regarding the details that supports the
transactions which is recorded in the accounting system of the company. The significant
source documents used in this case are the cash memo, receipts, pay in slip, cheques,
vouchers and many more. The source documents are basically used to retain the information
as the evidence at the time of thereview made by the auditor’sat the time of verifying the
transaction. The source of documents are retrieved from the backup which is maintainedby
the system of the company.
Answer to Question 6
Many errors are related to the human error within an organization. Along with that the
accounting errors which are considered as the major accounting errors are the error of
principle, errors of omission, clerical errors, compensating or offsetting errors, compensating
and offsetting errors and errors ion communication of the data. In an organization there must
be the internal control system of the company must be aware of the human errors which must
be taken care by the upper level management of the organization. The discussed errors within
an organization must be taken care of the management system of the company and strategies
must be adopted in order to rectify the human errors which takes place within the system. The
internal auditors in this case must take the initiatives in order to rectify the human errors
which take place within the system (Riker 2017).
Answer to Question 7
The purpose of trust is to set believe on the goals or accomplishment which is needed
to be undertaken by the management of the company. The trust may be own assets which are
further held for the beneficiaries of the trust and managed by the trustee. As trust plays
significant role so it must be maintained in order to accomplish the operational goals of the

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organization in that case. This is the reason behind the preference of such trust or further to
maintain trust in the management system so that the overall improvement of the company can
further be enhanced.
Establishing trust among the employees of the company is significant for the growth
of the organization. Influencing the employees by the process of the trust must take place for
the betterment of the company in case of the future aspects (Lu, Fan and Zhou 2016).
Answer to Question 8
The trustees must act as the advantages on behalf of the beneficiaries including decisions
regarding investments in the specified assets or products of the firm. The income stream is
managed on behalf of the trusts along with that the timings and way assets are distributed and
further payments to the beneficiaries are made.
The main powers of the trustee is to allow the proper administration of the trust
among this includes the buying and selling of the trust properties, determining the distribution
of the beneficiaries, tradesman and contractors along with that operating and maintaining the
opening and operating building or bank society accounts.
The reason behind not to become a trustee is that the risk associated to become the
trustee of the organization is very high. In this case payments are needed to be made at the
exact or the right time and on the other hand the unable to make the due payment are the risks
associated and for not becoming the trustee is the reason behind that (De Jong, Dirks and
Gillespie 2016).

7ESTABLISH AND MANAGE TRUST ACCOUNT
Answer to Question 9
There are various types of trusts which ate creased within the system and further they
differ according to their nature. There are basically two types of trusts which are the express
trust and non-express trust. The express trust actually consists of the Discretionary trust,
Executed trust, bare trust and special trust and finally constituted trust. In case of the non
express trust which consists of the implied trust, constructive trust , resulting trust, public and
private trust.
In case of the express trust, the trust is declared created by the express and
international declaration of the settlers. The declaration is basically in the form of the deeds
which deals with some cases relating to the respective parties indicating the significant
intentions.
Answer to Question 10
There are three features of the fiduciary relationship which are as follows:
 Generally relationship is based on the trust and confidence of the trustee/beneficiary
or partner/partner. There is certain incidence when the trustee's acceptance of the
trusteeship has been undertaken to act as per the interest of the other party. That
person has the power to have an effect on the interests of the other in a legal or
practical way. The significant element in the fiduciary undertakes or agrees to act on
behalf of the other person who shows interest and acts accordingly which will affect
the interests of that other person in a legal or practical sense.
 Relationship with certain and unequal bargaining power on the one party was the
reason behind relying on the other party. The law plays significant role in segregating
the person from such kind of disruptive situation.

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 Relationship on the other hand deals with reliability in particular situation where one
party rely on the other party and such kind of intrinsic relationship is build with trust
and confidence, such as reliance on a business partner or a bank manager.
The fiduciary obligation are recognized in a traditional manner and the elements for which
the reason behind such kind of obligations are beneficiary and executor, promoters of the
company, directors of the company, beneficiary and trustee, principle and agent, client,
stockbrokers and many more. The above authorized parties within an organization are the
example of the obligations within the system (Schoorman, Mayer and Davis 2016).
Answer to Question 11
Trusts are created by the process of the inter vivos which further means that the
parties are living the life. Trust is established and must be settled by satisfying the
requirements which are needed for both the trustee and the settlor. The certain requirements
in case of the express trusts are the building strong trust, identifying the trust property; parties
are further intended to get benefitted under the trust.
The discretionary trust is established on the basis of the transfer of property which
takes place between the trustee and the settlers under some of the major conditions. The
distribution basically takes place on the proportion as it is completely based on the trustee.
The term vesting day in this case is referred to as the large proportion of differentiation
among the employees which basically the trustee chose own their own way (Ert, Fleischer
and Magen 2016).

9ESTABLISH AND MANAGE TRUST ACCOUNT
Answer to Question 12
The winding up process in the trust is basically featured on the three options which
are as follows:
 The trust asset is distributed to the beneficiaries in terms of kind or in cash is
authorized by the terms listed in the instruments of trusts. The meanings are also
embedded under the discretionary trusts which are the trust estate, powers of
appointment, powers to accelerate vesting, and powers of maintenance or
advancement.
 The parties which are the trustee and the beneficiaries remain inclined towards the
statutory powers in order to vary the trust. Obligations regarding the tasks are further
brought by the trustee as interest of the beneficiaries varies accordingly.
 Disposition of the assets such as the business or the trust property to some other party.
Answer to Question 13
Manual transaction actually can result into a lot of human errors into the system
whereas on the other hand the electronic transaction results into more accurate results by
reducing the work load and time simultaneously. Opting for either manual or electronic
transaction is the own choice of the electronic system. Nowadays the money from the trust
account are generally transferred with the help of the electronic fund transfer. Payment by
the trustee is made from the trust account with the help of the electronic fund transfer.
The electronic or the manual considered some of the following elements which are the
bookkeeping, administrative systems, reporting requirements and disclosure ethical
requirements, legislative requirements and many more (Luhmann, N., 2018).
Answer to Question 14
The funds of the clients are protected in the following manner:

10ESTABLISH AND MANAGE TRUST ACCOUNT
 Documentation of the transaction and the records provides accuracy in the records of
the transaction in that case.
 Transactions are completed based on the documentation and authorization based on
the requirements.
 All the transaction is generated with trust account requirements which particularly
based on the demands.
 Securities and the audit related management to further make sure that the protection
of the client’s fund from the appropriate trust (Lins, Servaes and Tamayo 2017).
 The financial reports based on that are prepared for the clients in order to ensure the
accuracy in the data.
 Records are maintained accordingly and are conveniently managed and further
audited by the trusts.
 There lie the requirements of the third party professional along with the legislative
audit whenever it is required.
Answer to Question 15
Funds are basically disbursement when the party needs to pay money from the
account. The amount of the fund which is actually transferred happens from the account of
the party. Later the funds are checked for the accuracy whether the particular amount is
transferred from one party to the other. The negligible difference during the transfer of
money is generally identified during the course of the action. The fund of the clients is
generally transferred by the process of the electronic fund transfer (Liu et al. 2016).

11ESTABLISH AND MANAGE TRUST ACCOUNT
Answer to Question 16
The students generally understand that there are certain requirements regarding the
p+p requirements in the conducted study. The trust account in this case must be monitored by
the upper level management of the company. The beneficiary and the trustee are responsible
for the amount to be transferred in that case. The system is this case is generally reviewed
where the loopholes in the system is rectified as per the demand if the trustee and hence the
necessary actions are taken accordingly. The system must be upgraded on an interval basis
here the details regarding the client’ trust maintenance must be verified and checked on an
interval basis (Sicari et al. 2015).
Answer to Question 17
The auditing of the company is basically are of two types which are the internal and
the external auditing. The internal auditing refers to check of the internal aspects of the firm’s
liabilities and the balance sheet. The duty of the internal auditors is to find the glitches within
the system and assists the management of the organization to rectify such kind of internal
problem within the system. The financial reports are prepared and audited by the CPA in
order to understand if there is any misrepresentation in the financial statement of the
company. The legislation to be complied with it is auditing and assurance under the act of the
generally accepted accounting principle (Gentzkow, Wong and Zhang 2018).
Answer to Question 18
The requirement of the CPD is based on certain factors which are needed to be
incorporated in the organization. Further it is needed to training for the staffs within the
organization. Regain the trust of the accounts and It and the financial within the system of the
organization. The implementation of the plans takes place within the system. This can further

12ESTABLISH AND MANAGE TRUST ACCOUNT
be informal and at the end of the day it provides the employees with the best results (Newton,
Stolle and Zmerli 2018).
Answer to Question 19
The basic elements of the trust are the settler or the trust creator, settlers intends to
modify along with create the trust, trust property, trustee who owns the legal property,
equitable title which is further owned by the beneficiary. The four major elements to make up
the trust are to create the trust, specify the trust, valid purpose of the trust, intent of the trust
also plays significant role (Johnson and Cullen 2017).
Answer to Question 20
There are certain things needed to be done after receiving the money from the trust
which is to prepare the receipts and accepts the request of the clients. Then it is required to
enter into the trust account cash receipts of the clients. It is required to register the accounts
details in the ledger accounts and maintain the records accordingly. And lastly it is required
to deposit the money in the general trust account (Bottazzi, Da Rin, and Hellmann 2016).
Answer to Question 21
The basic requirements of the computerized accounting system comprise of the record
and in this case the information’s are needed to collect on the basis of the intervals. The
benefits of the computerized accounting system always reduce the manpower effort and the
paper work simultaneously. The basic requirements of the computerized accounting system
or software’s are that accounting framework, set of principles, coding and group structures of
accounting (Brookfield 2015).

13ESTABLISH AND MANAGE TRUST ACCOUNT
Answer to Question 22
At the end of each month the trust account must be kept and maintained. The accuracy
in the transaction is necessary and evaluation regarding the same must be accounted. The
trust account must be properly audited as it must ensure that the account is free from any sort
of fraud and misrepresentations (Poppo, Zhou and Li 2016).
Answer to Question 23
The ethical requirements are bounded for each and every organization. It is required
that the organization follows the footsteps of the legality and the ethics or the code of
conducts framed by the legislative body (Schulman et al. 2015).
Answer to Question 24
The fees are basically charged on the transaction of the systems and the service
provided to the clients of the company. Hence the cost of the same must be communicated to
the clients and must be sorted out by receiving the ultimate payments made by the clients
regarding the same.
Answer to Question 25
The regulation related to the trust accounts which are maintained by the management
of the company. Proper audit of the financial accounts of the company must be done which
must further ensure that the financial statements of the company is free from the material
misstatements. There are also some of the regulation in case of the trust money which is
further held as the general trust account or the controlled money account. The money of the
trust can only be withdrawn in the case of sub regulation.
Answer to Question 26
Records in terms of the audit where the record or the information’s are properly
maintained. The documentation is this case are properly checked in order to maintain the

14ESTABLISH AND MANAGE TRUST ACCOUNT
accuracy in the financial statement of the company. The information and the requirements in
this case clearly identified by the company and further steps in this case are taken by the
management in order to maintain accuracy of the same.
Role Play
I: What you know about our company?
Client: The Company is a highly reputed firm in the Middle East where the business of the
firm has been growing rapidly. The financial status of the firm is also improving constantly
improving and will further prosper in the future.
I: What more you want to know about our company?
Clients: It will far more interesting to know that if any future acquisition and merger of the
company or any kind of implementation of the new products which is extend the business
line going to take place.
I: What are the strengths of the company?
Clients: There are many strengths of the company consists of the effective employee attitude,
excellent customer service, the current share market of the company is also large, highly
efficient and the integrity of the company is also quite high.
I: What about the current status of the management system of the company?
Clients: The management system of the company is quite effective and the changes of the
management must be made accordingly in order to enhance the efficiency of the business.
I: Do you have any more questions?
Clients: Thank You Sir. That’s all I wanted to know about the company.

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