Professional Ethics_, Accountancy for Lawyers and Bench-Bar

Professional Ethics’, Accountancy for Lawyers and Bench-Bar Relations

Dr.S.R.MynehiAsia law House,

[email protected]

http://www.asialawhouse.com/

Accountancy for lawyers

• Meaning of Accountancy• Science of recording, classifying and summarizing in a significant manner in

terms of money transaction and events which in part, at least is of financial character and interpreting the results thereof.

• Nature and Function of Accountancy• Art of recording financial transactions.• Art of classifying financial transactions.• The transactions must be recorded in monetary terms.• Art of summarizing financial transactions.• Art of analysis and interpretation of financial transactions.


• Functions of Accounting• Systematic Record of transactions.• Communicating results to interested parties.• Compliance with legal requirements.• Ascertain the financial position of individual or business.

• Advantages of Accounting• Replacement of memory• Evidence in Court• Settlement of taxation liability• Comparative study• Assistance to various parties


• Disadvantages of Accounting• Records only monetary transactions• No realistic information• Personal bias of accountant affects the accounting statements• No real test of managerial performance• Accounting lacks a uniform procedure

BRANCHES OF ACCOUNTING

ACCOUNTING

FINANCIAL ACCOUNTING

OBJECTIVE: STATUS OF BUSINESS EG. PROFIT/LOSS

COST ACCOUNTINGOBJECTIVE:

DETERMINATION OF COST FOR CONTROL

MANAGEMENT ACCOUNTING

OBJECTIVE: TO SUPPORT MANAGERIAL FUNCTIONS ( PLANNING CONTROLLING DECISION MAKING)USING

FINANCIAL AND CCOST A/C)

BRANCHES OF ACCOUNTING FOR ADVOCATES

BRANCHES OF ACCOUNTING FOR ADVOCATES

BAR COUNCIL ACCOUNTING

(KNOW AND FOLLOW RULES OF BC)

LEGAL SERVICE ACCOUNTING

ACCOUNTING OF AIDS/ GRANTS FROM GOVT UNDER LEAGAL AID

WELFARE FUND ACCOUNTING

LEGAL PROVISIONS OF WELFARE FUND FOR

ADVOCATES

ADVOCATES INDIVIDUAL

ACCOUNTING MAINTAIN INDIVIDUAL ACCOUNTS FOR LEGAL

COMPLIANCE

ACCOUNTING AND LAW

• CRIMINAL LAWS RELATING TO MONEY NEED UNDERSTANDING OF ACCOUNTS• SPECIFIC LAWS RELATE TO ACCOUNTING

• INDIAN COMPANIES ACT• HIRE PURCHASE ACT• SALE OF GOODS ACT• PARTERNERSHIP ACT• INDIAN CONTRACT ACT• INDIAN BANKING ACT• INSOLVENCY ACT• NEGOTIABLE INSTRUMENTS ACT• INCOME TAX ACT• SALES TAX ACT• WEALTH TAX ACT• GRATUITY AND BONUS ACT• SOME OTHER LAWS ALSO HAVE ACCOUNTING IMPLICATIONS

REQUIREMENT OF ACCOUNTANCY FOR LAWYERS• BAR COUNCIL ACCOUNTING• ACCOUNTING OF LEGAL SERVICES AUTHORITY & SUPREME COURT

LEGAL SERVICE COMMITTEE• ACCOUNTING OF ADVOCATES AS PER SUPREME COURT RULES• WELFARE FUND ACCOUNTING• HOW TO PREPARE INVIDUAL (OWN) ACCOUNTS• OBLIGATIONS• FEE CONSISTENT WITH BAR AND NATURE OF CASE • ACCOUNTS OF CLIENTS’ MONEY WITH HIM (RULE 25 OF SECTION II CHAP II PART IV OF BCI RULES)

REQUIREMENT OF ACCOUNTANCY FOR LAWYERS• OBLIGATIONS

• FURNISH A COPY OF CLIENTS’ ACCOUNT ON DEMAND (RULE 30 OF SECTION II CHAP II PART IV OF BCI RULES)

• RECIEPTS HAVE TO BE ENTERED AS FEE OR EXPENSES AND NO EXPENSES MONEY CAN BE DIVERTED TO FEE A/C WITHOUT CONCENT IN WRITING (RULE 26 OF SECTION II CHAP II PART IV OF BCI RULES)

• RECEIPTS ON BEHALF OF CLIENT FROM ANY SOURCE NEEDS TO BE DISCLOSED TO CLIENT AT THE EARLIEST. (RULE 27 OF SECTION II CHAP II PART IV OF BCI RULES)

• ON TERMINATION OF PROCEEDINGS, LAWYER SHALL BE FREE TO ADJUST THE AMOUNT FOR EXPENSES LEFTOVER TOWARDS FEE DUE TO HIM. (RULE 28 OF SECTION II CHAP II PART IV OF BCI RULES)

• FOR UNSETTLED FEE, LAWYER CAN DEDUCT ANY MONEY REMAINING IN HAND (RULE 29 OF SECTION II CHAP II PART IV OF BCI RULES)


• STATE BAR COUNCIL ALLOCATES FUNDS FOR • WELFARE OF DISABLED ADVOCATES• LEGAL AID AS PER RULES• LAW LIBRARIES( SECTION 6(2) OF ADVOCATES ACT 1961

• STATE BAR COUNCIL RECEIVES GRANTS / DONATIONS CREDITED TO APPROPRIATE FUND AND ACCOUNTED FOR.• STATE BAR COUNCIL SHALL MANAGE AND INVEST FUNDS• EVERY BAR COUNCIL SHALL MAINTAIN BOOKS FO ACCOUNTS AND

AUDIT DULY AUDITED BY QUALIFIED AUDITORS AS PR COMPANIES ACT


• STATE BAR COUNCIL SHALL SEND AUDITED ACCOUNTS TO BCI ASAP BUT BEFORE 31ST DECEMBER OF FOLLOWING YEAR.• STATE BAR COUNCIL SHALL SEND AUDITED ACCOUNTS TO GOI ASAP BUT BEFORE

31ST DECEMBER OF FOLLOWING YEAR TO BE PUBLISHED IN THE GAZETTE.• ENROLMENT FEE OF STATE BAR COUNCIL Rs.600 TO BE PAID AND ADDITIONAL

STAMP DUTY ACCOUNTS MAINTAINED.• STATE BAR COUNCIL SHALL GET FINANCIAL ASSISTANCE BY BCI.• EVERY ADVOCATE SHALL PAY STATE BAR COUNCIL Rs.300 LIFETIME OR 90

ANNUALLY TO ENROLL.• SEPARATE AUIDITED ACCOUNT OF WELFARE OF ADVOCATES.• BCI SHALL UTILIZE THE FUNDS RECEIVED FROM STATE BAR COUNCILS (20%)

INCOME OF STATE BAR COUNCIL

• FEE SHALL BE LEVIED (NOT EXCEEDING THE CEILING)• PETITION CHALLENGING THE ELECTION• COMPLAINT OF PROFESSIONAL MISCONDUCT

• COPYING CHAREGES FOR FOLIO• APPLICATION FOR TRANSFER FROM ONE STATE BAR COUNCIL TO

ANOTHER• RESUMPTION OF PRACTICE

RULES RELATING TO FINANCE

• ALL MONEY RECEIVED SHALL BE ACKNOWLEDGED• BOOKS OF ACCOUNTS STRONGLY BOUND AND PAGED• RECEIPTS FORMS SHALL BE NUMBERED AND BOUND• PAYMENTS OVER Rs.50 SHALL BE IN CHEQUE.• PAYMENTS WILL BE AUTHORIZED BY SECRETARY AND CHECKED BY ACCOUNTANT, BOTH

RECEIPT AND BILL WILL BE PASTED TOGETHER AND NUMBERED• SALARY BILL SHALL BE AS PER DIRECTIONS OF EXECUTIVE COMMITTEE• AMOUNT OF PERMANENT ADVANCE SHALL BE MADE TO SEC / ACCOUNTANT• ALL EXPENSES SHALL BE APPROVED BY EXECUTIVE COMMITTEE• AMOUNT OF ADVCANCE TO BE GIVEN TO FIXED BY EXECUTIVE COMMITTEE• EXPENSES ENTERED IN CASHBOOK AND LEGDGER AT ONCE.VER • BCI WILL HAVE POWER TO BORROW MONEY/SIGN/MORTAGE.


• AUTHORISED CHAIRMAN / VICE CHAIRMAN FINAL AUTHORITY ON SACTIONED FIANACIAL BUDGET• AUTHORISED CHAIRMAN / VICE CHAIRMAN CAN SPEND 2000 P.M.

OVER THE SACTIONED FIANACIAL BUDGET IN EMERGENCY• AUTHORISED CHAIRMAN / VICE CHAIRMAN SANCTION TA/DA OF

MEMBERS • ACCOUNTS WILL BE AUDITED ONCE A YEAR.• AUDITED ACCOUNTS WILL BE LAID BEFORE THE EXECUTIVE

COMMITTEE BEFORE 31ST JULY EACH YEAR


• INVESTMENTS CAN ME DONE IN• SBI OR OTHER NATIONALIZED BANKS• SECURITES UNDER SECTION 20 OF INDIAN TRUST ACT • FD WITH GOVERNMENT COMPANIES AS PER COMPANIES ACT

• BUDGET ESTIMATES OF INCOME AND EXPENDITURE LAID BEFORE EXECUTIVE COMMITTEE BEFORE 31ST MARCH EACH YEAR• ALL CHEQUES, BILLS NOTES AND NEGOTIABLE INSTUREMENTS SHALL

BE SIGNED BY TWO PERSONS• COUNCIL BY RESOLUTION MAY OPEN A/C IN ANY BANK OR POST

OFFICE


• ALL MONEY & SECURITIES SHALL BE IN THE NAME OF COUNCIL• COUNCIL SHALL OPEN PF A/C IN BANK AS PER PF RULES

FUNDS OF STATE COUNCIL

• DEPOSITED IN SBI / NATIONALIZED BANK • STATE BAR COUNCIL MAY DECIDE TO DEPOSIT IN SECURITIES/GOVT

COMPANIES• STATE BAR COUNCIL SHALL HAVE PF DEPOSITED AS PER PF RULES• STATE BAR COUNCIL MAY ACCEPT DONATIONS IN CASH OR KIND• STATE BAR COUNCIL ACCOUNTS WILL BE AUDITED BY CA ANNUALLY

BOOKS AND REGISTERS TO BE MAINTAINED• MINUTES BOOK• ATTENDANCE REGISTER FOR STAFF• LEAVE REGISTER FOR THE STAFF• ACQUITTANCE REGISTER• DAY BOOK AND LEDGER• RECEIPT BOOK• FINANCIAL ASSISTANCE REGISTER• PROVIDENT FUND ACCOOUNT• PROPERTY REGISTER

ELIGIBILTY FOR ACCOUNTANT OF BCI

• M.COM.• EXPERIENCE OF 5 YEARS• MINUMUM 30 YEARS OF AGE• ANY TWO WAIVED OFF FOR SOMEONE ALREADY IN SERVICE AS

DEPUTY ASSITANT ACCOUNTANT

FINANCE ACCOUNTS AND AUDIT OF LEGAL SERVICES AUTHORITES• GRANTS BY CENTRAL GOVERNMENT• NATIONAL LEGAL AID FUND• STATE LEGAL AID FUND• DISTRICT LEVEL AID FUND

• ACCOUNTS AND AUDIT• PROPER ACCOUNTS TO BE MAINTAINED AND CAG TO AUDIT• RIGHT TO DEMAND ANY BOOK VOUCHERS DOCUMENTS AND PAPERS BY

AUDITERS• AUDITED REPORT TO BE FORWARDED TO CENTRAL OR STATE GOVERNMENT

BY AUDITORS AND LAID BEFORE EACH HOUSE OF PARLIAMENT/STATE LEGISLATURE

FUNDS, AUDIT AND ACCOUNTING OF THE SUPREME COURT LEGAL SERVICES COMMITTEE

• UNDER THE SC LEGAL SERVICE COMMITTEE REGULATION 1996• COMMITTEE SHALL MAINTAIN A FUND CALLED ‘SUPREME COURT LEGAL

SERVICES COMMITTEE FUND’• CREDITED WITH AMOUNTS ALLOCATED BY CENTRAL AUTHORITY• RECEIVED AS DONATIONS• RECEIVED AS COSTS CHARGES EXPENSES

• ALL AMOUNTS DEPOSITED IN BANKS• PERMANENT ADVANCE OF 2500 WITH SECRETARY• ALL EXPENSES AS PER CHAIRMAN TO BE MET FROM FUND• EXPENSES OF CHAIRMAN SHALL ALSO BE COVERED• SECRETARY AND ONE MEMBER SHALL JOINTLY OPERATE THE BANK ACCOUNT

FUNDS, AUDIT AND ACCOUNTING OF THE SUPREME COURT LEGAL SERVICES COMMITTEE

• UNDER THE SC LEGAL SERVICE COMMITTEE REGULATION 1996• MAINTAIN TRUE AND CORRECT ACCOUNT• ACCOUNTS TO BE AUDITED ANNUALLY• LEGAL SERVICE ADVOCATE SHALL BE PAID HONORARIUM AS FIXED BY

COMMITTEE

• ACCOUNTING OF ADVOCATES AS PER SUPREME COURT RULES 1966• EVERY ADVOCATE ON RECORD SHALL KEEP BOOKS OF ACCOUNTS• MONEY RECEIVED AND PAID ON BEHALF OF CLIENTS• MONEY RECEIVED AND PAID ON OWN ACCOUNT

• HE SHALL HAVE A REGISTERED CLERK AND SHOW CERTIFICATE OF FEE RECEIVED TO TAXING OFFICER BEFORE BILL OF COSTS IS FILED

ACCOUNTING OF ADVOCATES OR ADVOCATES PARTNERSHIP FIRMS• REGISTERS OF ACCOUNTING• ATTENDANCE REGISTER FOR STAFF• LEAVE REGISTER FOR THE STAFF• ACQUITTANCE REGISTER• PROVIDENT FUND ACCOOUNT• CASH BOOK • LEDGER• RECEIPT BOOK

ACCOUNTING OF ADVOCATES OR ADVOCATES PARTNERSHIP FIRMS• REGISTERS OF ACCOUNTING• CASH BOOK

• Column 3 is for Ledger Folio page where it is posted• All money transaction date wise

ACCOUNTING OF ADVOCATES OR ADVOCATES PARTNERSHIP FIRMS• REGISTERS OF ACCOUNTING• LEGDER

• Column 3 is for Ledger Folio page where it is posted• Transactions as per Account Head together on different dates• Summary statement of all transactions relating to a person, expense or

income• F stands for folio of day book.

DATE

PARTICULARSTo Name of Debit A/c

F AMOUNT

DATE

PARTICULARSTo Name of credit A/c

F AMOUNT

1 2` 3 4 5 6 7 8

ACCOUNTING OF ADVOCATES OR ADVOCATES PARTNERSHIP FIRMS• REGISTERS OF ACCOUNTING

• LEGDER• The entries are first made in day book and than transferred to concerned accounts

in ledger this is called posting.• BALANCING ACCOUNTS• The difference is written as balance c/d (carried down) either on debit or credit side

as case maybe.• DIFFERENCE BETWEEN CASH BOOK AND LEDGER

• CASH BOOK IS FIRT (ORIGINAL) ENTRY LEDGER IS SECOND• CASH BOOK IS IN CHROLOGICAL ORDER DATEWISE LEDGER HAS POSTING OF ACCOUNT

TOGETHER• CASH BOOK IS SOURCE AND HAS GREATER LEGAL EVIDENCE WEIGHTAGE• CASH BOOK IS SUBSIDIARY BOOK TO PRINCIPAL BOOK i.e. LEDGER• UNIT OF CLASSIFICATION IS DATE IN CASH BOOK AND ACCOUNT IN LEDGER• PROCESS OF RECORDING IN CASH BOOK IS ENTRY WHILE IN LEGER IT IS POSTING

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Professional Ethics_, Accountancy for Lawyers and Bench-Bar

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