Reference no: EM132521468

You are an internal auditor working at ICU Ltd and are currently in the process of auditing the accounts receivable department. ICU Ltd is in the retail industry and specialises in affordable clothing for the younger generation. Most of the sales are on credit and the accounts receivable department manages approximately 45 000 accounts.

During the audit engagement, you perform the following activities:

1. You visit the departments and observe the flow of the processes.

2. You use structured questionnaire to obtain information on the processes. The questions are structured to provide either a "yes" or "no" answer.

3. You interview an accounts receivable clerk and document the steps followed when a new customer opens an account by making a visual presentation.

4. You compare last year's accounts receivable balance to the previous two years and discover that the amount has increased significantly.

5. You decide to select 10% of the individual accounts to test for accuracy.

6. You obtain a printout of the accounts receivable ledge and after performing certain tests, you file it.

Question 1: For the above mentioned activities, provide the type of tool or technique and its purpose for use.