Books and Records
You will not find an explanation of accounting rules and principles or for how to operate a basic accounting system in the Uniform Trust Account Rules. The Rules do list the books and records you are required to keep as well as the rules governing the use of trust accounts. At a minimum, the Rules require that you keep all of the records listed at paragraphs 2(1) (a) – (j). See Appendix ‘A’ - Required Accounting Records Mandated under the Uniform Trust Account Rules, for a checklist of the accounting records that are mandated under the Rule.
Unless you have an accounting or business background, you will find the Accounting Module (Module 1), and its appendix titled ‘The Accounting Process’ drafted by Gilles E. Bujold, necessary reading to help you understand the trust accounting process. Consider that in addition to advising the Executive Director of the Law Society of the particulars of a newly opened trust account, you must also file a letter from an accountant certifying that you have an accounting system in place that complies with the Rules and that you have been instructed by your accountant in the procedures to be followed to operate your trust account in a manner that complies with the Rules. You are responsible for the funds you receive in trust, and if you are practising on your own, you alone are responsible. When you are being instructed on how to keep the books associated with your trust account, make sure to ask questions of your accountant and ensure that you understand the processes you must follow and your responsibilities under the Rules.
Essentially, you must record all receipts and disbursements through your account in at least the manner and detail required by the Rules. Pursuant to subsection 2(2) of the Rules, these books must be posted in ink or electronically, you may not use a pencil to record transactions. You must keep all of the records prescribed under the Rules for a minimum of seven years.