Ontario Real Estate Licensing Exam Practice · Question
A brokerage, after an independent audit, discovers that its trust account has a minor discrepancy that cannot be immediately reconciled. What is the brokerage's primary obligation under REBBA, 2002 regarding this discovery?
Any trust account discrepancy, regardless of perceived minor nature, must be reported to RECO immediately in writing according to REBBA, 2002 and its regulation
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Question: A brokerage, after an independent audit, discovers that its trust account has a minor discrepancy that cannot be immediately reconciled. What is the brokerage's primary obligation under REBBA, 2002 regarding this discovery?
Answer options:
- To attempt to reconcile the discrepancy internally for at least 30 days before taking further action. ✅ To immediately notify RECO in writing and provide a full explanation.
- To transfer funds from the general account to cover the discrepancy to avoid negative balance.
- To wait until the annual audit submission to report the unreconciled amount.
Correct answer: To immediately notify RECO in writing and provide a full explanation.
Explanation: Any trust account discrepancy, regardless of perceived minor nature, must be reported to RECO immediately in writing according to REBBA, 2002 and its regulations concerning trust account administration. This ensures transparency and allows RECO to monitor compliance.
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