BUSINESS AND COMMERCIAL KNOWLEDGE – AN INTRODUCTION

After studying this chapter, you will be able to:

1. Describe the domains of business and commercial knowledge (BCK).

2. Explain the importance of BCK for a Chartered Accountant.

3. Enhance BCK Quotient (BQ).

4. Distinguish the business from the myriad of human activities, more so from employment and profession perspectives.

5. Distinguish between proprietary and corporate forms of business organisations.

SUMMARY

Business and Commercial Knowledge (BCK) is a vast, eclectic and an ever evolving and ever expanding universe of knowledge. Professionals like Chartered Accountants whose primary arena of work comprises businesses must enhance their awareness of and engagement with the philosophies, lexicon and grammar of BCK. It is foundational to grasping the core. Thus, it is unlikely that one can truly master accounting and taxation that in popular perception comprise the core of the chartered accountancy without adequate base in BCK.

In this chapter, we have situated business in the wider context of human engagements, more so in the context of a myriad of economic activities. We have seen that business, as an economic activity is distinguishable from employment and profession. It focuses on production not for self-consumption but for markets. It is characterised by investment intensity and employment generation potential. It spurs economic growth via entrepreneurial initiative and creativity. We have also described the meaning of business ownership and the various forms it may take - single or sole and joint; proprietary and corporate. We have seen how unincorporated enterprises, more so sole-proprietorship comprise the informal sector, individually not as powerful but collectively an economic force to reckon with. The ownership of such enterprises is fraught with the fallouts of unlimited liability and their status as going concerns with fragility. We also saw how Hindu Undivided Family businesses comprise a distinct Indian form of business organisation. Finally, we focused on the growing corporatisation of the economic system. We studied as to how this form necessitated the development of a comprehensive system of incorporation, accounting, audit and accountability of the corporations toward the various stakeholders.