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By Tammy Hoang, Certified QuickBooks ProAdvisor A current ratio of 1.5 shows that for every dollar a company owes in short-term liabilities, it holds $1.50 in current assets. This generally suggests the business is in a comfortable position to cover its immediate obligations — there are more than enough liquid resources on hand to handle what's due in the near term. While a ratio above 1 is typically considered healthy, it's always good practice to compare this number against

By Tammy Hoang, Certified QuickBooks ProAdvisor Washington attorneys often refer to "1.15A compliance" as if it covers the whole trust account obligation. It does not. RPC 1.15A and RPC 1.15B are two separate rules governing two separate things, and a firm can be careful about one while quietly failing the other. Together, violations of these two rules account for roughly ten percent of all cited ethics rule violations in Washington's most recent discipline data — a meaningfu

By Tammy Hoang, Certified QuickBooks ProAdvisor Most Washington attorneys assume the Washington State Bar Association runs their entire trust account obligation. It does not. Washington splits this responsibility between two separate organizations, and understanding which one does what is the difference between knowing exactly where to send unidentified trust funds and guessing. The Legal Foundation of Washington administers the state's IOLTA program itself — collecting inter

By Tammy Hoang, Certified QuickBooks ProAdvisor The Washington State Bar Association publishes an annual discipline report, and the trust account numbers inside it tell a consistent story. Trust account overdrafts alone accounted for roughly four percent of all grievances filed against Washington attorneys, and violations of RPC 1.15A and RPC 1.15B together made up approximately ten percent of every ethics rule violation cited statewide. Ten percent is a striking share for tw

By Tammy Hoang, Certified QuickBooks ProAdvisor A Washington attorney pays a client cost — a filing fee, an expert's invoice — out of the firm's business checking account, planning to reimburse the expense from trust once the client's funds cover it. This is common practice. The timing of that reimbursement, however, is where a routine convenience turns into a real trust account exposure. The WSBA's own trust account guidance addresses this exact scenario directly, because it

By Tammy Hoang, Certified QuickBooks ProAdvisor Nearly every law firm's trust account eventually has a stray balance nobody can quite explain — a few hundred dollars left over from a closed matter, a deposit that no one can match to a client file, an old client trust balance no one has claimed in years. Washington's rules do not allow that money to just sit there indefinitely. It has to be resolved, and if it can't be, it has to go to the Legal Foundation of Washington. This

By Tammy Hoang, Certified QuickBooks ProAdvisor The Washington State Bar Association has explicit authority under its Enforcement of Lawyer Conduct rules to examine, investigate, and audit the books and records of any lawyer to determine compliance with RPC 1.15A — including examinations of firms selected entirely at random, with no complaint or trigger required. Washington was among the states, alongside New Jersey, that helped establish the model other states later adopted.

By Tammy Hoang, Certified QuickBooks ProAdvisor North Carolina has run a random audit program for attorney trust accounts since 1985 — one of the oldest in the country. The Trust Account Compliance program is real enough that the State Bar's longtime staff auditor is on a first-name basis with much of the bar: attorneys who have been through it simply know him as Bruno. The results after decades of auditing are sobering. One recent quarter, Bruno audited 60 law firms across t

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.