Walkthroug PEFR

Period-end Financial Reporting
There are two main categories of transaction in ABC Group:

1 Routine transaction (generated from day to day operation)
2 Non-routine transaction (ex: specific provision, reversal journal, etc.)
Accounts Accounts
Cashbook Inventory Fixed Assets A
Receivable Payables
General
Ledger
Trial Balance
Adjustments B
Financial
Statements C
ABC Group uses the SAP/ERP system for its financial reporting process (ABC Tbk, ABD and ADE). The financial bookkeeping process that was maintained
in SAP mainly related to the following modules: CB (cash book), AR (account receivable), AP (accounts payable), Fixed Assets, Inventory, and GL (general
ledger). There is a proper segregation of duties in the journal entry process, i.e. individuals which are responsible for initiating the journal entry are different
from the one who post the entry in SAP.
A Accounting staff have the responsibility to input the vouchers into the modules such Accounts Receivables module (AR) or Accounts
Payable module (AP) while the vouchers of cash payment or receipt are inputted by finance staff into the Cash Book module (CB). Every
journal input into SAP is subject to the review and approval of a higher authority person such as Finance and Accounting General Manager.
Review and approval of journal entries are done based on the supporting documents attached to the vouchers. Once the Finance and
Accounting General Manager has checked that the journal entry is prepared and the supporting documents, the Finance and Accounting
Supervisor will post the journal entry into the GL module. Due to the staff availability, the journal entries will be performed by Finance and
Accounting Supervisor, as below:
Account Receivables : (Finance and Accounting Supervisor)

Account Payables : (Finance and Accounting Supervisor)
Cashbook : (Finance and Accounting Supervisor)
Inventory : (Finance and Accounting Supervisor)
Fixed Assets : (Finance and Accounting Supervisor)
The Group's standard journal entries are those entries posted on a recurring basis, e.g. sales, expenses (COGS & OPEX), cash
disbursements, etc. These standard journal entries include recurring periodic journal entries for the accounting estimate, e.g. depreciation of
fixed assets, amortisation of intangible assets and mine properties. Non-standard journal entries are those that are made outside the normal
course of business and posted outside the company's normal processing. Examples include credit entries to expense accounts, debit
entries to sales accounts, period-end adjustments, etc.
B The non-routine journal entries, including the adjustment made will be prepared by Finance and Accounting Supervisor and will be reviewed
by Finance and Accounting General Manager. The review process is performed by email. Once the journal is approved, Finance
Accounting Supervisor will input it to SAP.
C The closing process is held at the latest on date 10 of the following month. They get the trial balance from the Finance and Accounting
Department. In this stage, adjustments are made to recognise non day to day transactions such as provision and accrual.
From the adjusted trial balance, Accounting Staff will prepare a monthly financial report that consists of a balance sheet, profit and loss, and
statement of cash flows. Finance and Accounting General Manager will review the report and investigate accounts with significant change
from the previous period. For consolidation purpose, after obtaining financial statements from subsidiaries then the Finance and Accounting
Supervisor will calculate the consolidation amount. After being reviewed by the Accounting & Finance General Manager, this consolidated
report will be submitted to the Directors, and then reported to the parent Company, for the Group consolidation process.
This review is an informal process that is not writtenly documented. We consider that this is still appropriate given that the Group does not
operate in the environment that requires strict documentation of control processes, e.g. SOX reporting.
Period-end Financial Reporting - Flowchart
Regular monthly closing

Year-end closing
Descriptions
MM Material Management
AA Asset Accounting
SD Sales Distribution
FICO Payroll System to the Company and its subsidiary which use SAP
Conclusion
Based on our observation of the Company's financial closing process, we conclude that the Company has implemented the control design
in the proper condition and no exceptions noted.

Walkthroug PEFR

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Period-end Financial Reporting

There are two main categories of transaction in ABC Group:

Account Receivables : (Finance and Accounting Supervisor)

Period-end Financial Reporting - Flowchart

Regular monthly closing

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