Day: January 19, 2026

Which ONE of the following controls would provide the most positive assurance as to the completeness of the sales figures recorded in the financial statements of an engineering company?

Select ONE answer:

1. Segregation of duties between the preparation of goods dispatched notes and the preparation of the sales invoices
2. The use of a pre-numbered goods despatched note for every sales transaction, and internal checking for completeness of processing
3. The issue of pre-numbered sales invoices for every sales transaction and internal checking for completion of processing
4. Authorisation of all sales invoices by the sales manager before processing

Show your workings to arrive at your answer, and explain and justify your reasons:

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This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. Correct – A sale should be recognised as soon as goods have been safely despatched to a customer and every despatch should be accompanied with a goods despatched note. Consequently to obtain assurance about the completeness of sales, the auditor needs to be confident that all despatch notes have been recorded in the accounting system. Checking that all sales invoices have been processed merely confirms that ‘all sales invoices have been processed (option 3) and similarly the existence of authorisation controls merely provides assurance as to whether transactions have been authorised (option 4). The existence of segregation of duty controls (option 1) does not in itself provide assurance as to completeness of recording of sales transactions.
3. Not correct
4. Not correct

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