Professional Ethics’,

Accountancy for Lawyers

and Bench-Bar Relations
Dr.S.R.Mynehi
Asia law House,
www.asialawhouse.com
asialaw@satyam.net.in
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.
Accountancy for lawyers
• 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
Accountancy for lawyers
• 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
BRANCHES OF ACCOUNTING FOR
ADVOCATES
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)
BAR COUNCIL ACCOUNTING
• 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
BAR COUNCIL ACCOUNTING
• 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.
RULES RELATING TO FINANCE
• 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
RULES RELATING TO FINANCE
• 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
RULES RELATING TO FINANCE
• 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
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
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

PARTICULA F AMOU PARTICULARS F AMOUN

DAT RS NT DAT To Name of T
E To Name of E credit A/c
Debit A/c
1 2` 3 4 5 6 7 8

• 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.
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
The end