The overall objective of the audit of the sales and collection cycle is to evaluate whether:
A) the sales account and the accounts receivable account are free of errors.
B) the account balances affected by the cycle are fairly presented in accordance with Australian accounting standards.
C) the sales account and the accounts receivable account are presented fairly in accordance with generally accepted accounting principles.
D) the sales account and the accounts receivable account are free of material errors.

Question

Quizplus · Accepted Answer

The objective of the audit of the sales and collection cycle is to evaluate whether the account balances affected by the cycle are fairly presented in accordance with Australian accounting standards. This includes evaluating the completeness, accuracy, and validity of sales and accounts receivable transactions and balances, as well as assessing the adequacy of internal controls over these transactions. The objective is not just to ensure the accounts are free of errors or presented fairly in accordance with generally accepted accounting principles, but specifically in accordance with Australian accounting standards.

The Overall Objective of the Audit of the Sales and Collection