A 9-Step Checklist for Your Accountant’s Report

Yasho Dhoraisingam enlightens us on the steps you can take to ensure that your accountant’s report is in order and ready for filing in March.

Come March it will be that time of the year again when proprietors and partners (salaried and equity) of law firms and solicitors who held or received clients’ money must deliver their accountant’s reports to the Law Society’s Council. 

In this month’s column, I describe a 9-step checklist which I hope you will use to ensure that your accountant’s report is in order before filing the same with the Law Society.   

The Checklist

Check that:

  1. the format of your accountant’s report is as set out in the Schedule to the Legal Profession (Accountant’s Report) Rules (1999 Revised Rules) (the Rules);

  2. the citations to the Legal Profession Act (the Act), Legal Profession (Solicitors’ Accounts) Rules and the Legal Profession (Accountant’s Report) Rules are the current revised editions;

  3. your full name is correctly, if cited, described in the heading to the report;

  4. your firm’s name and address are correctly, described in the heading to the report;

  5. your firm's descri bed as a partnership or sole-proprietorship for the material accounting period in the heading of the report. If you practised last year as both as a proprietor and partner of a law firm, you must submit two separate accountant’s reports for each type of practice. This is required even if the names of both practices are the same. If you practiced as Lee & Co partnership from 1 January 1999 to 30 June 1999 and then Lee & Co sole proprietorship from 1 July 1999 you must submit two separate reports for each type of law firm;

  6. the accounting period as described in the heading of the report. The accounting period must coincide with the times you were a partner or proprietor of the firm that year. Please refer to the paragraph headed ‘Accounting period’;

  7. paragraphs 1 and 2 of the report use words as set out in the Schedule to the Rules. In particular, check paragraph 2 of your report. The words to be used to describe the results of the two dates of reconciliation required of your client’s account are set out in the Schedule. Your accountant has one of two options. No variations can be made to the words as described. Check also to ensure that your accountant has described two dates of reconciliation as required by the Rules. For example, if you were a partner of a firm from 1 January 1999 to 31 January 1999, there must be two dates chosen by your accountant for the month of January in paragraph 2 of your report;

  8. your report to see if there are any qualifications made by your accountant to the first and second sections of the Report. Please refer to the paragraph headed ‘First and Second Sections of your accountant’s report’;

  9. Finally, if you ceased practice as a sole proprietor or partner in a law firm or vice versa in the course of the year, then your accountant’s report must contain a third paragraph as described below under the heading ‘Cessation of practice as a proprietor or partner of a law firm’.

Accounting Period

Under section 73(3) of the Legal Profession Act (the Act), the accounting period may cover less than 12 months, but cannot exceed 12 months. For example, if your accountant delivers an accountant’s report which describes the accounting period from 1 January 1999 to February 2000, such a report will be rejected by the Law Society.  

The dates of reconciliation of your client’s account described in paragraph 2 of the report must coincide with the period during which you were a partner or proprietor of the firm. Therefore, if you were a partner of a firm from 1 January 1999 to 31 March 1999, the minimum two dates chosen by your accountant must be between January and March 1999 when you were a partner of the firm and not any other months.

First and Second Sections of Your Accountant’s Report

Your accountant will complete the First Section if he is not satisfied on certain matters after carrying out the checks required by Rule 4 of the Rules. Your accountant will complete the second section of the report if he had found breaches of the Solicitors’ Accounts Rules.

The Council will consider any qualifications under both these sections and determine if under section 25A(1)(h) of the Act, the Council should apply to the Registrar to refuse or attach conditions to the practising certificate.

Cessation of Practice as a Proprietor or Partner of a Law Firm

If you ceased to practice as a proprietor or partner of a firm or vice versa as you joined another firm or became a consultant of a firm, then your accountant’s report must contain an additional third paragraph as described below.

Having ceased to practice under the style of ... the said ... ceased to hold client’s money on ...

If after having left a firm as a partner or proprietor to practice in another firm, you are unable to distribute the client’s money of your former firm, then you cannot produce what is described as a final accountant’s report. The accountant’s report you will submit for your former practice must instead contain a third paragraph as follows:

Having ceased to practice under the style of ... the said ... still continues to hold clients’ money under that style.

Yasho Dhoraisingam  
Director, Professional Standards  
The Law Society of Singapore