The overall objective in 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 sales account and the accounts receivable account are free of material errors.
C)the sales account and the accounts receivable account are presented fairly in accordance with an applicable financial reporting framework.
D)the account balances affected by the cycle are fairly presented in accordance with an applicable financial reporting framework.

Question

Quizplus · Accepted Answer

The overall objective of auditing the sales and collection cycle is to evaluate whether the account balances affected by the cycle are fairly presented in accordance with an applicable financial reporting framework. This includes ensuring that all relevant accounts, such as sales and accounts receivable, are accounted for accurately and fairly. Therefore, options A, B, and C would be too narrow in focus and do not address the overall objective of the audit.

The Overall Objective in the Audit of the Sales and Collection