ACCOUNTANT'S REPORT RULES

ACCOUNTANT'S REPORT RULES

ACCOUNTANT'S REPORT RULES

ARRANGEMENT OF RULES

Rule Page
1. Citation A2
2. Interpretation A2
3. Qualifications of accountant A 2
4. Duties of an accountant A 3

5. Forms ................................. ... ... ... ... ... ... ... A4

6. Exemption from requirement to deliver accountant's report ... ... ... ... A4
7. Initial accounting periods ... ... ... ... ... ... ... ... ... ... ... A4
8. Accounting periods ... ... ... ... ... ... ... ... ... ... ... ... A 5
9. Diffierent accounting periods ... ... ... ... ... ... ... ... ... ... A 5
10. Notices to solicitors ... ... ... ... ... ... ... ... ... ... ... ... A 5
11. Notices to accountants ... ... ... ... ... ... ... ... ... ... ... ... A 6
12. Power of waiver ... ... ... ... ... ... ... ... ... ... ... ... ... A 6

Schedule...Form................................ ... ... ... ... ... ... ... ... A6





ACCOUNTANT'S REPORT RULES

(Cap. 159, section 73)

[1st June, 1965.1

1. These rules may be cited as the Accountant's Report Rules.

2. In these rules, unless the context otherwise requires-

'client' means any person on whose account a solicitor holds or
receives client's money;

'client account' means a current or deposit account at a bank in the
name of the solicitor in the title of which the word 'client' appears;

'client's money- means money held or received by a solicitor on account
of a person for whom he is acting in relation to the holding or
receipt of such money either as a solicitor or, in connexion with his
practice as a solicitor, as agent, bailee, stakeholder, solicitor-trustee
or in any other capacity, but not money to which the only person
entitled is the solicitor himself or, in the case of a firm of solicitors,
one or more of the partners in the firm:

Provided that the expression -client's money' shall not extend
to money held or received by a solicitor holding an office to which
section 75(a) of the Ordinance applies, in the course of his
employment in such office, or to money paid without delay into an
account subject to public or official audit;

'solicitor' means a solicitor of the Court and any firm of solicitors;

'solicitor-trustee' means a solicitor who is a sole trustee or who is co-
trustee only with a partner, clerk or servant of his or with more than
one of such persons; and

'trust money' means money held or received by a solicitor which is not
client's money and which is subject to a trust of which the solicitor
is a trustee, whether or not he is solicitor-trustee of such trust.

3. (1) An accountant shall be qualified to give an accountant's
report on behalf of a solicitor, in accordance with the provisions of
section 8 of the Ordinance if

(a)he is a professional accountant holding a practising certificate
as provided in the Professional Accountants Ordinance;

(b)he has neither been at any time during the accounting period,
nor subsequently, before giving the report, become a partner,
clerk or servant of such solicitor or of any partner of such
solicitor; and





(c)he is not subject to notice of disqualification under paragraph
(2).

(2) If either-

(a)the accountant has been found guilty by the Disciplinary
Committee appointed under section 33 of the Professional
Accountants Ordinance of professional misconduct or
dishonourable conduct; or

(b)the Committee is satisfied that a solicitor has not complied with
the provisions of the Solicitors' Accounts Rules in respect of
matters not specified in an accountant's report and that the
accountant was negligent in giving such report,

the Committee may at its discretion at any time notify the account-
ant concerned that he is not qualified to give an accountant's report,
and the Committee may give notice of such fact to any solicitor on
whose behalf he may have given an accountant's report, and after
such accountant shall have been so notified, unless and until such
notice of disqualification shall have been withdrawn by the Commit
tee, the accountant shall not be qualified to give an accountant's
report:

Provided that in coming to its decision under this paragraph,
theshall take into consideration any observations or
instructions made or given by the accountant or on his behalf by
the professional body of which he is a member.

4. (1) With a view to the signing of an accountant's report an
accountant shall not be required to do more than

(a) make a general test examination of the books of account of the
solicitor;

(b) ascertain whether a client account is kept;

(c)make a general test examination of the bank passbooks and
statements kept in relation to the solicitor's practice;

(d)make a comparison, as at not fewer than 2 dates selected by the
accountant, between

(i) the liabilities of the solicitor to his clients and, if trust
money has been paid into the client account under the
Solicitors' Accounts Rules, to the cestuis que trustent, as
shown by his books of account, and

(ii) the balances standing to the credit of the client account;
and

(e)ask for such information and explanations as he may require
arising out of paragraphs (a) to (d).

(2) If after making the investigation prescribed by paragraph (1) it
appears to the accountant that there is evidence that the Solicitors'
Accounts Rules have not been complied with, he shall make such
further investigation as may be necessary to enable him to sign the
accountant's report.





5. All accountant's reports delivered by a solicitor under these
rules shall be in accordance with Form 1 in the Schedule.

v\

6. The Committee will in each practice year be satisfied that
the delivery of an accountant's report is unnecessary, and shall not
require evidence of that fact, in the case of any solicitor who

(a) holds his first current practising certificate; or

(b)after having for 12 months or more ceased to hold a current
practising certificate, holds his next current practising
certificate; or

(e)holds a current practising certificate after having, in the
declaration lodged by him with the Society to lead to the issue
of that practising certificate, declared that either

(i) the Solicitors' Accounts Rules did not apply to him
because he had not, during the period to which such
declaration referred, practised on his own account either alone
or in partnership or held or received client's money; or

(ii) he was exempt from complying with the Solicitors'
Accounts Rules by virtue of holding one of the offices to
which section 75 of the Ordinance applies and had not, during
the period to which such declaration referred, engaged in
private practice; or

(d)has ceased to hold a current practising certificate and, if he
has at any time after the date of the commencement of these
rules held or received client's money, has delivered an
accountant's report covering an accounting period ending on
the date upon which he ceased to hold or receive client's
money; or

(e)has at no time since the date of the commencement of these
rules held a current practising certificate or held or received
client's money.

7. The accounting period specified in an accountant's report
delivered during the practice year beginning on the date of the
commencement of these rules shall begin on

begin

(a)the date to which the solicitor's books were last made up
before the date of the commencement of these rules; or

(b)if the books were not made up during the practice year
beginning on the date of the commencement of these rules,
either the date of the commencement of these rules, or the day
upon which the solicitor first began or began again to hold or
receive client's money, whichever is the later,

and shall cover not less than 6 months, or, in the case of a solicitor
retiring from practice who has ceased to hold or receive client's money
after the day before the date of the commencement of these rules, the
period up to the date upon which he so ceased.





8. In any practice year beginning on or after the date of the
commencement of these rules

(a) in the case of a solicitor who-

(i) becomes under an obligation to deliver his first
accountant's report, or

(ii) having been exempt under rule 6 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, and may cover
less than 12 months, and shall in all other respects comply
with the requirements of section 8(2) of the Ordinance; and

(b)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 account's report, the accounting
period shall end on the date upon which he ceased to hold or
to receive client's money, and may cover less than 12 months,
and shall in all other respects comply with the requirements of
section 8(2) of the Ordinance.

9. (1) In any practice year beginning on or after the date of the
commencement of these rules, in the case of a solicitor who

(a)was not exempt under rule 6 from delivering an accountant's
report in the preceding practice year; and

(b)since the expiry of the accounting period covered by such
accountant's report has become, or has ceased to be, a
member of a firm of solicitors,

the accounting period may cover less than 12 months and shall in all
other respects comply with the requirements of section 8(2) of the
Ordinance.

(2) In the case of a solicitor who has 2 or more places of business

(a)separate accounting periods, covered by separate
accountant's reports, may be adopted in respect of each such
place of business, provided that the accounting periods
comply with the requirements of section 8(2) of the Ordinance
and with these rules; and

(b)the accountant's report or accountants' reports delivered by
him to the Committee in each practice year shall cover all
client's money held or received by him.

10. Every notice to be given by the Committee under these rules to
a solicitor shall be in writing under the hand of the Secretary and sent
by registered post to the last address of the solicitor appearing





in the roll of solicitors, and, when so given and sent, shall be deemed
to have been received by the solicitor within 48 hours of the time
of posting.

11. Every notice to be given by the Committee under these
rules to an accountant shall be in writing under the hand of the
Secretary and sent by registered post to the registered office of the
accountant, and, where so given and sent, shall be deemed to have
been received by the accountant within 48 hours of the time of
posting.

12. The Committee shall have power to waive in writing any of the
provisions of these rules, other than those of rule 3(2), in any particular
case.

SCHEDULE

FORM 1 [rule S]

ACCOUNTANT'S REPORT RULES

ACCOUNTANT'S REPORT

1. (a)Solicitor's full name:

2. (b)Firm(s) name(s) and address(es):

3. State whether practising
alone or in partnership:

4. (c)Accounting period(s):

In compliance with section 8 of the Legal Practitioners Ordinance and the
Accountant's Report Rules made thereunder, I . ....................................

have examined the books, accounts and
of the above-ramed d** solicitor ii relating to the above practice(s)
produced to me and 1 hereby certify that from my examination pursuant to rule
4 of the Accountant's Report Rules and from the explanations and information
given to me, 1 am satisfied that-

(d)(1) during the above-mentioned period(s) he has complied with the

provisions of the Solicitors' Accounts Rules,(d) except so far as concerns

(i) certain trivial breaches due to clerical errors or mistakes in book

keeping, all of which were rectified on discovery, I am satisfied that
none of such breaches resulted in any loss to any client;

(ii) the matters set out on the back hereof.

(d)(2) having retired from active practice as a solicitor the said ...............

................ ceased to hold client's money on

the ...day of .........19

Accountant's full name:
Qualifications:
Firm name:
Address:
Signature:
Date:







To: The Committee,
The Law Society of Hong Kong,
Room 1236, Swire House
Hong Kong.
Notes: (a)In the case of a firm with a number of partners, carbon copies of the Report may be delivered
provided section 1 above is completed on each Report with the name of the individual solicitor.

(b) All addresses at which the solicitor(s) practise(s) must be covered by an Accountant's

Report or Reports.

(c) The period(s) must comply with section 8(2) of the Legal Practitioners Ordinance.

(d) Delete clause not applicable.
L.N. 102/64. L.N. 20/70. L.N. 197/73. L.N. 211/76. L.N. 65/65. Citation. L.N. 20/70. Interpretation. Qualifications of accountant. L.N. 20/70. L.N. 197/73. (Cap. 50.) L.N. 197/73. (Cap. 50.) (Cap. 159, sub. leg.) Duties of an accountant. L.N. 20/70. (Cap. 159, sub. leg.) Forms. L.N. 20/70. L.N. 211/76. Form 1. Exemption from requirement to deliver accountant's report. L.N. 20/70. L.N. 211/76. (Cap. 159, sub. leg.) Initial accounting periods. L.N. 20/70. Accounting periods. L.N. 20/70. Different accounting periods. L.N. 20/70. L.N. 211/76. Notices to solicitors. Notices to accountants. L.N. 20/70. L.N. 197/73. Power of waiver. L.N. 20/70. L.N. 211/76.

L.N. 102/64. L.N. 20/70. L.N. 197/73. L.N. 211/76. L.N. 65/65. Citation. L.N. 20/70. Interpretation. Qualifications of accountant. L.N. 20/70. L.N. 197/73. (Cap. 50.) L.N. 197/73. (Cap. 50.) (Cap. 159, sub. leg.) Duties of an accountant. L.N. 20/70. (Cap. 159, sub. leg.) Forms. L.N. 20/70. L.N. 211/76. Form 1. Exemption from requirement to deliver accountant's report. L.N. 20/70. L.N. 211/76. (Cap. 159, sub. leg.) Initial accounting periods. L.N. 20/70. Accounting periods. L.N. 20/70. Different accounting periods. L.N. 20/70. L.N. 211/76. Notices to solicitors. Notices to accountants. L.N. 20/70. L.N. 197/73. Power of waiver. L.N. 20/70. L.N. 211/76.

https://oelawhk.lib.hku.hk/items/show/2717

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