Tag (SQ): Control Objectives

When considering the internal controls in a revenue cycle, the auditor will need to consider the following stages:

• the processing of orders; and
• the despatch and return of goods

Required:
(a) Specify the control objectives for each of the above stages in a revenue cycle where all sales are made on a credit basis and explain their importance.

(b) List the internal controls you would expect to see in place in a simple manual system in order to achieve those objectives.