The sales budget is prepared first because it drives most other operating and financial budgets. Expected sales volume and selling price determine revenue forecasts, production requirements, inventory planning, purchasing needs, labor needs, overhead planning, and cash inflows. The production budget cannot be prepared until expected unit sales and desired inventory levels are known. The cash budget depends on sales collections, purchases, payroll, expenses, capital spending, and financing activity, so it comes later in the budgeting sequence. Selling and administrative expenses may be estimated independently in some areas, but they are still commonly influenced by sales levels and planned business activity. In internal audit planning, auditors reviewing budgeting controls should verify whether the organization begins with realistic sales assumptions. Therefore, Option C is correct.