Which statement is NOT correct regarding trust account requirements?

The statement that a firm must maintain a separate bookkeeping and trust account for each branch office is not correct because typically, regulatory bodies allow firms to manage their trust accounts centrally, regardless of the number of branch offices. Firms usually have the flexibility to create a single trust account that serves the entire operation or may be required to have a trust account for each location depending on local regulations, but not necessarily a separate bookkeeping system for each branch.

In contrast, the requirement for separate accounts for each client ensures that individual client funds are protected and not commingled with those of other clients or the firm's operating funds. This is a key aspect of fiduciary responsibility. Disclosing trust account balances to clients promotes transparency and trust in the relationship between the firm and its clients. Maintaining accurate records of trust transactions is also essential for compliance with legal and regulatory standards, safeguarding client funds, and ensuring the integrity of the trust account.