This question tested the area of internal control objectives and control procedures and was incorrectly answered by the majority of candidates.

The question required identification of controls which would address the sales cycle objective of ensuring that all goods despatched were completely and accurately invoiced. Hence the controls needed to identify if any goods could be or had been despatched but not invoiced.

Procedure 1 focused on goods which had been despatched and required the GDN to be matched to the sales invoice. Hence this control would address the given sales objective as it would allow for any GDNs that did not have a corresponding invoice to be identified.

Procedure 2 confirmed the completeness of sales invoices; this control would ensure that all invoices had been recorded. However, it would not give assurance that all goods which had been despatched had been invoiced.

Procedure 3 does not confirm that the goods had actually been despatched as there is no check to the GDN.

Procedure 4 focused on identifying any unfulfilled orders, a possible reason for an order showing as unfulfilled is because the goods had been despatched but the accounting records are incomplete as the sales invoice has not been raised.

The correct answer was therefore D, options 1 and 4.