ACCA Audit and Assurance (F8) Practice Exam

In the context of sales, which area does not fall under Ordering controls?

1. Discounts properly authorized

2. Orders match dispatch notes

3. Invoices entered into ledger

4. Customer has good credit

The correct answer is: Invoices entered into ledger

The aspect of sales that does not fall under Ordering controls is the entry of invoices into the ledger. Ordering controls are primarily concerned with the processes involved in managing customer orders from initiation to fulfillment. This typically includes ensuring that discounts are authorized, that orders correspond with dispatch notes to prevent discrepancies, and that customers have the required creditworthiness to make purchases. When discussing ordering controls, the focus is on the mechanisms that ensure effective order management, including the verification of customer credit (ensuring they are reliable customers), and the matching of orders with dispatch notes to confirm that what was ordered matches what is sent out. Meanwhile, the entry of invoices into the ledger represents a separate function related to the accounting and reporting of sales rather than the ordering process itself. This function is more involved with accounting controls which handle the recording of financial transactions after the sales have been processed.