The overall objective in the audit of the sales and collection cycle is to evaluate whether

Question 3

Multiple Choice

Question 3

The overall objective of the audit of the sales and collection cycle is to evaluate whether:


A] the account balances affected by the cycle are fairly presented in accordance with Australian accounting standards.
B] the sales account and the accounts receivable account are presented fairly in accordance with generally accepted accounting principles.
C] the sales account and the accounts receivable account are free of material errors.
D] the sales account and the accounts receivable account are free of errors.

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    What is the objective of sales audit?

    Sales Audit is a part of the Merchandise Operations Management [MOM] product group, which helps retailers to reduce shrinkage, reduce integration costs, improve internal control, increase productivity, and improve visibility to sales.

    What are the audit procedures for the sales and collection cycle?

    Common internal controls over the sales cycle include numbered sales invoices, purchase order authorization over a certain limit and authorization over receivables write-offs. The auditor selects a random sample of transactions and examines the related purchase orders, invoices and customer statements.

    What are the objectives of an auditing?

    Main Objective: The main objective of the auditing is to find reliability of financial position and profit and loss statements. The objective is to ensure that the accounts reveal a true and fair view of the business and its transactions.

    What is Auditors objective in the audit of account receivable and sales?

    The overall objective of the audit of accounts receivable and sales is to determine if they are fairly presented in the context of the financial statements as a whole. The sales account is closely tied to accounts receivable; therefore, evidence supporting accounts receivable tends to support sales.

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