AUDITS AND EXAMINATIONS
Because of the importance of trust fund handling, the Commissioner has an ongoing program of examining
brokers’ records. As necessary, audited licensees are made aware of deficiencies in trust fund handling and
record keeping. If an audit discloses actual trust fund imbalances or money handling procedures which may
cause monetary loss, appropriate disciplinary proceedings are initiated.
Section 10148 of the Business and Professions Code provides that a real estate broker shall retain for three years
copies of all listings, deposit receipts, canceled checks, trust records, and other documents executed by or
obtained by the broker in connection with any transaction for which a real estate broker license is required. The
retention period shall run from the date of the closing of the transaction or from the date of the listing if the
transaction is not consummated. After notice, such books, accounts and records shall be made available for
examination, inspection and copying by the Commissioner or a designated representative during regular
business hours, and shall, upon the appearance of sufficient cause, be subject to audit without further notice,
except that such audit shall not be harassing in nature.