Auditing-B. com 3 rd Year Unit I introduction to Auditing Meaning and Definition of Auditing

Meaning of Business 
Business simply means any economic activity carried on for earning profits. Section2 (3) of Income Tax 
Act 1961, has defined term Business as, “Any trade, commerce, manufacture or any adventure or 
concern in the nature of trade, commerce and manufacture.” In the words of Justice S.R. Das, “The 
Word ‘Business’ connotes some real, substantive and systematic or organized course, activity or 
conducted with a set purpose.” 
In This connection it is not necessary that there should be a series of transactions in business 
and also it should be carried on permanently. Neither repetition nor continuity of similar 
transactions necessary. 
Meaning of Profession 
 
A Profession is an occupation requiring purely intellectual skill or manual skill controlled by the 
intellectual skill of operator e.g. Lawyer, Accountant, Engineer, Surgeon etc. So profession refers to 
those activities where livelihood by the persons through their intellectual or manual skill. Under section 
2 (6) profession includes vocation. 
Vocation simply means any type of activity in which a person is engaged and he earns hi 
livelihood from such activity. 

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UNIT: 5
Audit of Institutions
Audit of Accounts of partnership Firms 
To avoid any misunderstanding and doubt, partnership firms recognize the advantage of audit 
of financial statements. Partnership deed on mutual agreement between the partners may provide for 
audit of financial statements. Auditor is appointed by the mutual consent of all the partners. Rights, 
duties and liabilities of the auditor are defined in the mutual agreement and can be modified by 
partners. It will be in the interest of the auditor to get in writing the nature and scope of his work to 
avoid any dispute later on.