What is the concept of professional accountancy in legal profession?
Answers
Answered by
2
accountancy means a method of keeping a track of the money received and the money spent. Accountancy is all pervasive, starting right from a simple housewife, who has to manage her household expenses in a limited budget to a large corporate entity where accounting implies, apart from complying with statutory requirements, a means to measure the value of the business.
For an ordinary individual, for example, a housewife, accountancy is a loosely termed as ‘hisab’ and merely involves keeping a track of money in hand, received or earned and money spent on day to day expenses. For daily earners, accountancy or even hisab holds no meaning and importance, but for obvious reasons.
In the strict term, accountancy can be defined as the principles of recording the incomes earned and expenses incurred to earn the income, wealth, or assets created out of the income earned and the liability taken upon towards running of an enterprise and generating income and wealth.
The importance of core accounting is necessarily understood by persons, individuals or entities, who are involved in an activity that generates income out of the efforts of such individuals or entities. This is because, for every effort put in, the result is measured in terms of value earned for the effort. For every value earned, the efforts put in involve certain amount of expenses, which may be incurred out of the existing available resources or from borrowed funds. Unless there is a proper system of accounting for any entrepreneurial activity, the satisfaction of viewing the final results of the activity will not be easily identifiable.
Accountancy is a compulsory part of almost all medium and large scale business and service oriented enterprises, mainly due to the fact of compliance with statutory provisions and tax
laws. For example, in case of a corporate entity, maintenance of books of accounts is mandatory along with Statutory Audits and Tax Audits in certain cases. In case of small and medium enterprises, which are not corporate structures, accountancy is compulsory to comply with tax laws and the laws governing the small and medium enterprises. Individuals operating as proprietors are not governed by any law other than the Income Tax laws and hence maintenance of books of accounts is compulsory for certain proprietorship concerns.
As mentioned earlier, accountancy is important to any entrepreneurial activity, which involves not only the business of trading but also activities of professionals like doctors, chartered
accountants, lawyers and management consultants. I shall now discuss accountancy in relation to the activities of a legal professional.
For an advocate, the most important investment in his profession is the qualification earned. This can be called as the initial investment required for setting up a legal practice. Unlike a business activity, where initial capital investment can be brought into account, a professional qualification cannot be quantified and accounted as initial capital investment. However, one of the important ingredients for a practicing professional should be a bank account meant only for the purpose of the practice, as distinct from a normal savings or current account which may be in existent at the time of beginning of the practice. The amount put in at the time of opening the bank account can for the purpose of accounting be termed as the initial capital investment.
For an ordinary individual, for example, a housewife, accountancy is a loosely termed as ‘hisab’ and merely involves keeping a track of money in hand, received or earned and money spent on day to day expenses. For daily earners, accountancy or even hisab holds no meaning and importance, but for obvious reasons.
In the strict term, accountancy can be defined as the principles of recording the incomes earned and expenses incurred to earn the income, wealth, or assets created out of the income earned and the liability taken upon towards running of an enterprise and generating income and wealth.
The importance of core accounting is necessarily understood by persons, individuals or entities, who are involved in an activity that generates income out of the efforts of such individuals or entities. This is because, for every effort put in, the result is measured in terms of value earned for the effort. For every value earned, the efforts put in involve certain amount of expenses, which may be incurred out of the existing available resources or from borrowed funds. Unless there is a proper system of accounting for any entrepreneurial activity, the satisfaction of viewing the final results of the activity will not be easily identifiable.
Accountancy is a compulsory part of almost all medium and large scale business and service oriented enterprises, mainly due to the fact of compliance with statutory provisions and tax
laws. For example, in case of a corporate entity, maintenance of books of accounts is mandatory along with Statutory Audits and Tax Audits in certain cases. In case of small and medium enterprises, which are not corporate structures, accountancy is compulsory to comply with tax laws and the laws governing the small and medium enterprises. Individuals operating as proprietors are not governed by any law other than the Income Tax laws and hence maintenance of books of accounts is compulsory for certain proprietorship concerns.
As mentioned earlier, accountancy is important to any entrepreneurial activity, which involves not only the business of trading but also activities of professionals like doctors, chartered
accountants, lawyers and management consultants. I shall now discuss accountancy in relation to the activities of a legal professional.
For an advocate, the most important investment in his profession is the qualification earned. This can be called as the initial investment required for setting up a legal practice. Unlike a business activity, where initial capital investment can be brought into account, a professional qualification cannot be quantified and accounted as initial capital investment. However, one of the important ingredients for a practicing professional should be a bank account meant only for the purpose of the practice, as distinct from a normal savings or current account which may be in existent at the time of beginning of the practice. The amount put in at the time of opening the bank account can for the purpose of accounting be termed as the initial capital investment.
Answered by
0
Answer:
accountancy means a method of keeping a track of the money received and the money spent.
Similar questions