RTD Ltd provides pay TV services across Australia. To subscribe to RTD, customers call a hotline number, select the package they require and provide a credit card number, to allow automatic payment of the monthly fee. Approximately 600 new subscribers sign up each month.

There are no contracts and no payments accepted other than via credit card. There is no hard-copy documentation generated in relation to the salehotline staff enter the customers details directly into the computer, which then generates the relevant journal entries and postings to the ledger.

From discussions with management, you believe this system has not changed since you tested it during last years audit, when you placed a high level of reliance on the controls and found only one minor deviation.

Required:

If you have decided it is appropriate to test internal controls over the relevant transactions, provide a brief explanation of how the information provided above would affect the nature, timing and extent of your tests of controls.