Accounting Principles and Procedures

Question 1

What is the relevant legislation relation to handling a client’s money?

Answer 1

RICS Professional Standard: Client Money Handling
Effective from 1st January 2020

Question 2

Client money handling (effective 2020)

What are the three main objectives of this professional standard?

Answer 2

• Client money is kept safe
• Client money accounts are used for appropriate purposes only
• RICS-regulated firms have appropriate controls to safeguard client money

Question 3

What are the two RICS Client Money Protection Schemes?

Answer 3

• RICS Client Money Protection Scheme for Surveying Services (UK)
• RICS Client Money Protection Scheme for Property Agents (England)

Question 4

What are the key requirements for holding client money?

Answer 4

• Hold money in authorised client money account with exclusive firm control
• Keep client money separate from office money
• Include “client” and firm name in account title
• Ensure immediate availability unless client instructs otherwise
• Get bank acknowledgment that money won’t be combined with other accounts

Question 5

What information must be provided to clients in writing?

Answer 5

• Confirmation of client money account details
• Disclosure of firm’s control over money
• Information about Client Money Protection coverage
• All commissions earned
• How unidentified funds are handled
• Written procedures for handling client money

Question 6

What are the key compliance requirements?

Answer 6

• Follow anti-money laundering rules
• Comply with anti-bribery requirements
• Obtain required certifications
• Investigate and remedy breaches promptly
• Record breaches in detail
• Report misappropriation immediately

Question 7

What are the main requirements for RICS members?

Answer 7

• Comply with anti-money laundering rules
• Follow firm’s client money procedures
• Not override money protection controls
• Report risks or misappropriation immediately

Question 8

The 6 key areas of good practice for client money handling are:

Answer 8

1. Accounting records and controls - maintaining proper books and documentation
2. Banking controls - ensuring secure account management and authorization
3. Controls on receipt of client money - procedures for identifying and processing incoming funds
4. Payment controls - authorization and verification processes for outgoing payments
5. Reconciliations - regular checking and balancing of accounts
6. General controls - staff training, segregation of duties, and written procedures