The State Bar of California is cracking down on transparency and reporting practices for attorneys who keep funds in trust for their clients with a required compliance review under the Client Trust Account Protection Program (CTAPP).
Introduced by the State Bar of California, CTAPP is a reporting and compliance program designed to ensure attorneys maintain proper trust accounting practices, protect client funds and uphold professional responsibilities.
Last year, the State Bar began conducting compliance reviews of attorneys’ trust accounting practices to ensure licensees who hold funds for clients keep accurate and complete records and communicate related actions to clients in a timely manner. Approved accounting firms are performing these reviews on behalf of the State Bar.
If you’re a California attorney or run a law firm, this guide will walk you through what CTAPP is, what the compliance review process entails and how to prepare if you’re selected.
The State Bar of California created this compliance program to address a growing number of complaints about attorneys mishandling client funds. Whether due to intentional misconduct or a lack of understanding of the rules, these issues prompted the State Bar to put a process in place beginning with rules in 2023 and conducted 100 formal reviews in 2025.
Under CTAPP, attorneys must now:
Each year, the State Bar will select up to 800 attorneys to evaluate compliance with the Rules of Professional Conduct and applicable laws related to the safekeeping of funds entrusted by clients, others and any related obligations.
The review will assess whether State Bar licensees and their firms keep accurate, complete records of trust account activity and communicate with clients per the professional conduct standards.
If an attorney doesn’t comply with the CTAPP rules, they may be assessed a noncompliance fee.
You’ll receive a formal notice from the State Bar if you’re selected for a review, and you’ll have 30 days to engage with an approved accounting firm.
The CTAPP review is a detailed examination of an attorney’s client trust accounting practices by an approved CPA. The State Bar is looking for accurate records and adherence to professional standards. Performed by an accounting firm under an Agreed Upon Procedures (AUP) engagement, all reviewers follow the exact same procedures to ensure consistency and fairness across all reviews.
Here’s what the review includes:
From our point of view as an approved CTAPP reviewer, selection for a review doesn’t mean the State Bar is suspecting you of mishandling client trust accounts. We see this as an opportunity to improve your processes and educate your team on trust funds.
The State Bar has said it will meet with the designated licensee to go over the compliance review results, with a primary goal being education. Minor issues will be addressed, and the attorney or firm will receive further education on how to adopt trust account best practices.
Material issues will be addressed through a corrective action plan.
You can select which approved accounting firm you want to work with on your CTAPP review. These firms are approved because they meet certain criteria, including:
The CPA firm will complete specific procedures under the direction of the State Bar and not provide a specific opinion about their findings. They will provide a description of the factual findings after they complete the review. For example, they may review a sample of your records to determine whether you notified your client within 14 days that you received their funds as required by the Rules of Conduct.
As they are completing this review, they may ask you for supporting documentation if your records don’t provide enough information to complete the test.
The State Bar has said it estimates the CTAPP will require about 20-25 hours for the CPA to complete their review. If you’re selected to complete a review, you are responsible for the cost. You can keep costs in line with the State Bar’s estimate if you have good records and respond promptly to the CPA’s request for documentation.
If you are a solo practitioner or your firm has a gross income of less than $150,000, you can apply for an exemption to hiring a CPA firm for the compliance review. If you are exempt, a State Bar CPA will complete your review at no cost.
If you’re selected for a CTAPP review, you’ll want to work with a CPA firm that can answer all of your questions about the process, get a clear estimate on costs and time to perform according to your unique situation and feel comfortable with their process.
Here are some recommendations on how to select a firm for your CTAPP review:
Since the technical services are standardized, focus on a firm that offers exceptional client service, industry expertise and responsiveness. These factors will give you peace of mind as you go through this review process.
With deep expertise working alongside 350+ law firms annually, we bring the responsiveness and industry knowledge you need to get through this review with confidence. Find out more about our compliance services to get your CTAPP questions answered.
Our seasoned audit experts can help you streamline your audit experience and strengthen your financials. Contact us today for a free scoping call to assess your needs.
