- You are required to discuss five control objectives that an internal control system over sales aims to achieve.
- To ensure that the company only sells to credit worthy customers. This is aimed at reducing the risk of selling to un credit worthy customers resulting in bad debt losses;
- To ensure that all sales made to customers are subsequently billed and recorded in the ledger;
- To ensure that all sales made are recorded in the correct financial period;
- To ensure that sales are billed at the approved selling prices;
- To follow up on payments from customers and ensure that customers are adhering to the approved terms of credit;
- To ensure that there is proper control and authorisation of bad debts write offs.