Apple Sidecar for Mac is a great way to use the iPad as a secondary screen.
However it appears that there is no support for sound. Is this correct, or am I doing something wrong?
I am on MacOS Catalina and iPadOS 14.1
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Sidecar extends your display and audio is not a component of a display.
This is just another way to extend your desktop with another monitor. When you do that, you don't extend your audio as well. Audio is a different entity all together. In the support document linked above, there's no mention, whatsoever of audio.
It's probably confusing that when you connect a monitor with built in speakers via an HDMI cable that the display supports audio. That's not entirely accurate - as stated before, display and audio to macOS are two distinct entities. It will see the speakers of the display as an audio device and you have the option to send audio there or to the internal speakers or to any other connected audio device. So, while it's built in, they're not tied together.
Sidecar doesn't make the speakers of the iPad appear as audio devices to your Mac.