Accountancy is the science, art and practice of an accountant. It is a
discipline which records, classifies, summarises and interprets financial
information about the activities of a person or concern so that intelligent
decisions can be made about the future actions.
Functions Of Accounting:
- Systematic record of transactions.
- Communicating results to the interested parties.
- Compliance with legal requirements.
- Ascertain the financial position of individual.
Advantages Of Accounting:
- Replacement of memory.
- Evidence in court.
- Settlement of taxation liability.
- Comparative study.
- Assistance to various parties.
Limitations Of Accounting:
- Records only monetary transactions.
- No realistic information.
- Personal bias of accountant affects the accounting statements.
- No real test of managerial performance.
- It lacks a uniform procedure.
Need For Accountancy For Lawyers:
Lawyers have to maintain accounts and for this they should have the knowledge
of accounting due to the following reasons:
- As a member of the Bar Council, he should know its accounting.
- He should know Legal services Authorities and Supreme Court Legal
- He should know the accounting of Advocates as per Supreme Court rules.
- He should know the welfare fund accounting.
- He should know how to prepare his own accounts.
- Hikmat Ali Khan v. Ishwar Prasad Arya and Others (AIR 1997 SC 864).
The Supreme Court held that the conduct of Ishwar Prasad, an advocate was
such that his name should be removed from the state roll of advocates as he
was found guilty of an offence of attempting to commit murder and convicted
for it and as he was unworthy of remaining in the profession.
- Pawan Kumar Sharma v. Gurdial Singh (1998 (7) SCC 24).
The court held that mere ownership of the taxi cannot lead to any
irresistible conclusion that he was engaged in “taxi business” to constitute
- Harish Chander Singh v. Suman Dondey (1999 (2) SCC 215).
The court held that the disciplinary committee of bar council could not have
held the advocate guilty of charge of misappropriation especially without
going the whole of accounts.
- Hamiraj L. Chulani v. Bar Council of Maharashtra & Goa (AIR 1996 SC
The Supreme Court held that the rule made by the bar council restricting the
entry of a person already carrying on other profession is not arbitrary and at
the same time it does not impose reasonable restrictions.