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
DAT RS
NT
E
To Name of
Debit A/c
1

2`

PARTICULARS
DAT To Name of
E
credit A/c
5

AMOUN
T

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