Question

Which one of the following best describes the auditors responsibilities regarding appropriate authorizations in the sales/collections cycle?

A) Credit must be authorized before the sale.
B) Goods must be shipped after the authorization
C) Prices must be authorized.
D) All of the above should be of concern to the auditor.

Answer 1

The auditors' responsibilities in the sales/collections cycle include authorizing credit, ensuring goods are shipped after authorization, and authorizing prices.

Step-by-step explanation:

The auditors' responsibilities regarding appropriate authorizations in the sales/collections cycle include:

1. Credit must be authorized before the sale: Auditors should ensure that proper credit checks and approvals have been obtained before a sale is made.
2. Goods must be shipped after the authorization: Auditors should verify that goods are not shipped before proper authorization has been received.
3. Prices must be authorized: Auditors should confirm that prices charged to customers have been approved and are in accordance with company policies.

Therefore, the correct answer is option D) All of the above should be of concern to the auditor.