Legal Profession (Accountant’s Report) Rules

Legal Profession Act

(Chapter 161, Sections 73(4))

R 10

REVISED EDITION 1999

(1st January 1999)

[8th August 1985]

Citation

1. These Rules may be cited as the Legal Profession (Accountant’s Report) Rules.

Definitions

2. In these Rules —

“approved finance company” means any finance company registered under the Finance Companies Act (Cap. 108) which is approved by the Minister to accept deposits of client’s money for the purposes of these Rules;

“bank” has the same meaning as in the Banking Act (Cap. 19);

“bank statement” means a statement issued by a bank in respect of any client account maintained at such bank, and includes a statement issued by an approved finance company in respect of a client account maintained at such finance company;

“client”, “client account”, “client’s money” and “trust money” have the meanings respectively assigned to them by the Legal Profession (Solicitors’ Accounts) Rules (R 8);

“Public Accountants Oversight Committee” means the Public Accountants Oversight Committee appointed under section 4 of the Accountants Act 2004 (Act 4 of 2004);

[S 108/2004 wef 01/04/2004]

“trust account” has the meaning assigned to it by the Legal Profession (Solicitors’ Trust Accounts) Rules (R 9).

Qualified accountant

3.—(1) An accountant shall be qualified to give an accountant’s report on behalf of a solicitor if —

(a)

he is practising in Singapore and is authorised to practise as a public accountant under the Accountants Act (Cap. 2);

(b)

he has neither been at any time during the accounting period, nor subsequently, before giving the report, become —

(i)	a partner or an employee of the solicitor or of any partner of his; or
(ii)	a partner, a director, a member or an employee of a limited liability law partnership, a law corporation, a Joint Law Venture, a constituent foreign law practice (of a Joint Law Venture), a Qualifying Foreign Law Practice or a licensed foreign law practice in which the solicitor is a partner or director; and [S 661/2006 wef 01/01/2007] [S 479/2008 wef 19/09/2008]

(c)

he is not subject to a notice of disqualification under paragraph (2) or under rule 11A(4) of the Legal Profession (Solicitors’ Accounts) Rules (R 8).

(2) Where —

(a)	the Public Accountants Oversight Committee has made a disciplinary order against a public accountant under section 52 (2) of the Accountants Act (Cap. 2) or an equivalent provision under the repealed Accountants Act (Cap. 2, 2001 Ed.); or
(b)	the Council is satisfied that a solicitor has not complied with the provisions of the Legal Profession (Solicitors’ Accounts) Rules in respect of matters not specified in an accountant’s report and that the accountant who gave the report was negligent in giving the report, whether or not an application be made for a grant out of the Compensation Fund,

the Council may, in its discretion, at any time notify the accountant that he is not qualified to give an accountant’s report.

(3) The Council may give notice, of the fact that an accountant is not qualified to give an accountant’s report, to any solicitor who appears to the Council to be likely to engage or employ that accountant for the purpose of giving an accountant’s report or to be a book-keeper for the purposes of rule 11(8) of the Legal Profession (Solicitors’ Accounts) Rules.

(4) After the accountant has been notified by the Council that he is not qualified to give an accountant’s report and until such notice of disqualification has been withdrawn by the Council, he shall not —

(a)	be qualified to give an accountant’s report; and
(b)	be engaged or employed as a book-keeper for the purposes of rule 11(8).

(5) In coming to its decision, the Council shall (if the decision is based on a matter referred to in paragraph (2)(a)) take into consideration any observation or explanation made or given by the accountant or on his behalf by the Public Accountants Oversight Committee.

[S 108/2004 wef 01/04/2004]

Duties of accountant

4.—(1) For the purpose of giving an accountant’s report, an accountant shall ascertain from the solicitor particulars of all accounts (excluding trust accounts) maintained by the solicitor at any bank or with any approved finance company kept, maintained or operated by the solicitor in connection with his practice at any time during the accounting period to which his report relates and, subject to paragraph (2), make the following examinations of the books, accounts and other relevant documents of the solicitor:

(a)

examine the book-keeping system in every office of the solicitor so as to enable the accountant to verify that such system complies with rule 11 of the Legal Profession (Solicitors’ Accounts) Rules (R 8), and is so designed that —

(i)	an appropriate ledger account is kept for each client;
(ii)	such ledger accounts show separately from other information particulars of all clients’ money received, held or paid on account of each client;
(iii)	transactions relating to clients’ money and any other money dealt with through a client account are recorded in the solicitor’s books so as to distinguish such transactions from transactions relating to any other money received, held or paid by the solicitor;

(b)

make test checks of postings to clients’ ledger accounts from records of receipts and payments of clients’ money and make test checks of the costs of such accounts and records;

(c)

compare a sample of lodgments into and payments from the client account as shown in bank statements with the solicitor’s records of receipts and payments of clients’ money;

(d)

enquire into and test check the system of recording costs and of making transfers in respect of costs from the client account;

(e)

make a test examination of such documents as he shall request the solicitor to produce to him with the object of ascertaining and confirming —

(i)	that the financial transactions, (including those giving rise to transfers from one ledger account to another) evidenced by such documents, are in accordance with the Legal Profession (Solicitors’ Accounts) Rules (R 8); and
(ii)	that the entries in clients’ ledger accounts reflect those transactions in a manner complying with the Legal Profession (Solicitors’ Accounts) Rules;

(f)

extract (or check extractions of) balances on the clients’ ledger accounts during the accounting period under review at not fewer than 2 dates selected by the accountant (one of which may be the last day of the accounting period), and at each such date —

(i)	compare the total as shown by such ledger accounts of the liabilities to the clients including those for whom trust money is held in the client account, with the cash book balances on client account, clients’ fixed deposit accounts with banks and approved finance companies including those for whom trust money is held and other fixed deposit accounts; and
(ii)	reconcile such cash book balances and fixed deposit with confirmations obtained by the accountant direct from the bank or approved finance company;

(g)

satisfy himself that reconciliation statements have been kept in accordance with rule 11(4) of the Legal Profession (Solicitors’ Accounts) Rules;

(h)

make a test examination of the clients’ ledger accounts in order to ascertain whether payments from the client account have been made on any individual account in excess of money held on behalf of that client;

(i)

peruse such office ledger and cash accounts and bank statements as the solicitor maintains with a view to ascertaining whether any client’s money has not been paid into a client account; and

(j)

ask for such information and explanations as he may require arising out of sub-paragraphs (a) to (i).

(2) Nothing in paragraph (1) shall require the accountant —

(a)	to extend his enquiries beyond the information contained in the relevant documents relating to any client’s matter produced to him supplemented by such information and explanations as he may obtain from the solicitor;
(b)	to enquire into the stocks, shares, other securities or documents of title held by the solicitor on behalf of his clients; or
(c)	to consider whether the books or accounts of the solicitor have been properly written up in accordance with rule 11 of the Legal Profession (Solicitors’ Accounts) Rules (R 8) at any time other than the times as at which his examination of those books and accounts takes place.

(3) If after making an examination under paragraph (1), it appears to the accountant that there is evidence that the Legal Profession (Solicitors’ Accounts) Rules have not been complied with, the accountant shall make such further examination as may be necessary in order to complete his report with or without qualification.

Privilege

5.—(1) Nothing in these Rules shall deprive a solicitor of the right on the grounds of privilege as between solicitor and client to decline to produce to the accountant any document which the accountant may consider it necessary for him to inspect for the purposes of his examination in accordance with rule 4.

(2) Where the solicitor so declines, the accountant shall qualify his report to that effect setting out the circumstances.

Accountant’s report

6.—(1) An accountant’s report delivered by a solicitor or a partner or director of a limited liability law partnership or law corporation under these Rules shall be in the form set out in the First Schedule or in a form to the like effect approved by the Council.

[S 467/2001 wef 01/10/2001]

[S 661/2006 wef 01/01/2007]

[S 479/2008 wef 19/09/2008]

(2) The accountant’s report must include the identification number of the accountant giving the report.

[S 75/2000 wef 01/03/2000]

Where accountant’s report unnecessary

7. The Council will, in each practice year, be satisfied that the delivery of an accountant’s report under section 73(1) of the Act is unnecessary and shall not require evidence of that fact, in the case of any solicitor who —

(a)

does not hold a practising certificate and —

(i)

has never held one; or

(ii)

having held one, has not practised in any Singapore law practice at any time during the accounting period ending on the date upon which he ceased to practise, or has delivered an accountant’s report in respect of his practice in a Singapore law practice covering the accounting period ending on the date upon which he ceased to practise and to hold or receive client’s money; or

[S 479/2008 wef 19/09/2008]

(b)

holds a current practising certificate —

(i)

for the first time;

(ii)

for the first time, after having for 12 months or more ceased to do so; or

(iii)

has satisfied the Council that —

(A)

the Legal Profession (Solicitors’ Accounts) Rules (R 8) are not applicable to him because he is employed only as an assistant solicitor by another solicitor or firm of solicitors or limited liability law partnership or law corporation and has not, during the period to which the said application relates, practised alone or in partnership or been held out to the public as a partner or director of a firm of solicitors, limited liability law partnership or law corporation or held or received client’s money; or

[S 661/2006 wef 01/01/2007]

[S 479/2008 wef 19/09/2008]

(B)

the Legal Profession (Solicitors’ Accounts) Rules are not applicable to him because during the period to which the said application relates he has not practised as a solicitor alone or as a partner or director of a firm of solicitors, limited liability law partnership or law corporation or been held out to the public as a partner or director of a firm of solicitors, limited liability law partnership or law corporation or has not held or received client’s money.

[S 661/2006 wef 01/01/2007]

[S 479/2008 wef 19/09/2008]

Accounting period for solicitor exempted under rule 7 obliged to deliver first report

8.—(1) In the case of a solicitor who —

(a)	becomes under an obligation to deliver his first accountant’s report; or
(b)	having been exempt under rule 7 from delivering an accountant’s report in the preceding practice year, becomes under an obligation to deliver an accountant’s report,

the accounting period shall begin on the date upon which he first held or received client’s money, or, after such exemption, began again to hold or receive client’s money.

(2) The accounting period referred to in paragraph (1) may cover less than 12 months and shall in other respects comply with the requirements of section 73(3) of the Act.

(3) In the case of a solicitor retiring from practice who, having ceased to hold or receive client’s money, is under an obligation to deliver his final accountant’s report, the accounting period —

(a)	shall end on the date upon which he ceased to hold or receive client’s money;
(b)	may cover less than 12 months; and
(c)	shall in all other respects comply with the requirements of section 73(3) of the Act.

Accounting period for other solicitors

9. In the case of a solicitor who —

(a)	was not exempt under rule 7 from delivering an accountant’s report in the preceding practice year; and
(b)	since the expiry of the accounting period covered by his last accountant’s report has become, or ceased to be, a member of a firm of solicitors or a partner or director of a limited liability law partnership or a law corporation,

the accounting period may cover less than 12 months and shall in all other respects comply with the requirements of section 73(3) of the Act.

Requirements of Council — how made

10. Every requirement to be made by the Council of a solicitor under these Rules —

(a)	shall be made in writing under the hand of the Director or a member of the Council designated by the Council for the purpose; and
(b)	may be served on the solicitor by sending the document by registered post to his usual or last known address.

Notice given by Council to accountants

11. Every notice to be given by the Council to an accountant under these Rules —

(a)	shall be in writing under the hand of the Director or a member of the Council designated by the Council for this purpose; and
(b)	may be served on the accountant by sending the notice by registered post to the address of the accountant as shown on the accountant’s report or appearing in the Register of Public Accountants kept and maintained under the Accountants Act (Cap. 2). [S 108/2004 wef 01/04/2004] [S 479/2008 wef 19/09/2008]

Waiver

12. The Council may, if it thinks fit in any particular case, waive any of the provisions of these Rules in writing, subject to such terms and conditions as the Council may impose.

[S 108/2004 wef 01/04/2004]

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