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By Tammy Hoang, Certified QuickBooks ProAdvisor Here is something most New York attorneys don't realize: the Appellate Division's rules have authorized a random audit program for attorney trust accounts since 1994. It has simply never been implemented. Today, a New York trust account only gets examined if a client files a complaint or a bank reports a dishonored check — there is no proactive, random compliance check the way New Jersey, North Carolina, Florida, and Texas all r

By Tammy Hoang, Certified QuickBooks ProAdvisor New Jersey runs one of the oldest and most active attorney trust account audit programs in the country. The Office of Attorney Ethics has operated a Random Audit Compliance Program since the early 1980s and a Trust Account Overdraft Notification Program since 1985, and together they support what New Jersey's own regulators call a "culture of compliance." Selection is random. You do not have to do anything wrong to be picked. A 2

By Tammy Hoang, Certified QuickBooks ProAdvisor California's Client Trust Account Protection Program made national headlines when mandatory reviews began in September 2025, but random and structured attorney trust account audits are not a new idea. Several states have been doing this for decades — New Jersey and North Carolina both since 1985, Florida since the earliest days of IOLTA in the 1980s, Washington with random examination authority built directly into its enforcemen

By Tammy Hoang, Certified QuickBooks ProAdvisor Florida invented IOLTA. The Florida Bar Foundation launched the nation's first program in 1981, and every other state eventually followed — under the name IOTA in Florida specifically. Being first also means Florida has had the longest time to build enforcement teeth around it, and those teeth are real: random compliance audits, a mandatory annual certification every August 15, and contempt proceedings for attorneys who fail to

By Tammy Hoang, Certified QuickBooks ProAdvisor Every quarter, the State Bar of Texas's Random Trust Account Audit program selects two judicial districts by computer, then randomizes the list of attorneys within those districts and audits 60 of them — proportionally allocated by district size. An attorney does not need to be a trust account signatory to be selected, and if any lawyer at a firm is chosen, the auditor reviews every trust account associated with the entire firm.

By Tammy Hoang, Certified QuickBooks ProAdvisor Commingling client funds is the trust accounting violation California attorneys are disciplined for most often, and it almost never begins the way people assume. The attorneys who lose their licenses over it are usually not stealing. They are behind on their bookkeeping. Rule 1.15 of the California Rules of Professional Conduct requires that funds belonging to clients — settlement proceeds, advanced fees not yet earned, money fo

By Tammy Hoang, Certified QuickBooks ProAdvisor An attorney trust account audit in California follows a defined checklist. The reviewer is a Certified Public Accountant approved by the State Bar, the engagement is agreed-upon procedures rather than a traditional audit, and the document requests are predictable. That predictability is the good news, because it means a firm can be ready in advance. The State Bar began mandatory reviews on September 29, 2025, notifying selected

By Tammy Hoang, Certified QuickBooks ProAdvisor QuickBooks IOLTA accounting works well when it is structured correctly and fails badly when it is not. The software does not know that the money in your trust account belongs to your clients. It will let you pay a firm expense from the IOLTA without a warning, and it will reconcile the account cleanly while a client ledger sits negative. That gap is where California firms get into trouble. With the State Bar selecting up to 800

By Tammy Hoang, Certified QuickBooks ProAdvisor IOLTA three-way reconciliation is the single most important control in law firm accounting, and it is the first thing a State Bar reviewer asks to see. If your California firm holds client funds and cannot produce twelve months of written reconciliations, the conversation goes badly from there. The requirement is not new. California adopted the Trust Account Record Keeping Standards in 1993, and the duty to reconcile monthly has

By Tammy Hoang, Certified QuickBooks ProAdvisor A CTAPP compliance review is no longer a rare event for California attorneys. The State Bar of California now selects up to 800 licensees every year for a mandatory examination of their client trust account records, and the notice arrives without warning. If your law firm bookkeeping has been handled casually, that letter is the moment it stops being casual. The Client Trust Account Protection Program was created after the Girar

By Tammy Hoang, Certified QuickBooks ProAdvisor Every California attorney who handles client trust funds is now required to comply with CTAPP — the Client Trust Account Protection Program — a State Bar initiative that layers annual registration and self-assessment requirements on top of the existing trust accounting rules under Rule of Professional Conduct 1.15. If you are asking what CTAPP means for your law firm, the short answer is that it changes how the State Bar verifie

By Tammy Hoang, Certified QuickBooks ProAdvisor Every law firm that handles client money — retainers, settlement proceeds, court fees — is required to keep that money in a specific kind of account and record it in a specific way. That system is IOLTA bookkeeping: Interest on Lawyers' Trust Accounts, the pooled trust accounts nearly every U.S. state requires attorneys to use when holding client funds that are too small or too short-term to earn meaningful interest for the indi