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What should be the primary purpose of an audit clause in a partnership deed?

Answer and explanation

Correct answer: To ensure reliability and transparency of the accounts

The primary purpose of an audit clause is to provide for independent verification of the books so that accounts are reliable, accurate and transparent. An audit helps detect errors or fraud and confirms correct profit allocation among partners. Option C is related but not the main purpose — audits may reveal irregular drawings, yet the core aim is overall verification and transparency. Exam tip: when a deed mentions 'audit' or 'books to be audited', choose the option mentioning verification, accuracy or transparency.

Related tags

Audit ClausePartnership DeedAccountingTransparencyInternal ControlPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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