You are on page 1of 10

CHIANG & CO.

(AF 0147)
KINO MACHINERY SALES & SERVICES SDN. BHD.
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016
COST OF SALES - WORKING PAPERS
Notes
1

Purchases

Sample selection
method :
Objective :

Non-statistical
Obtain comfort that the purchases have been accurately captured and that the transaction occurred.

Define
misstatement :

The total amount in the invoice not tally with the general ledger or no invoice or any supporting documents for the transactions.

Determine
sample size :

Total sub-population :
Performance materiality :
Maximum tolerable misstatement :
Estimated misstatement :
Tolerable misstatement :
Precision :
Required level of assurance :
Sample size :

Sample selection
method :

129,747 (Per Mgmt)


3,000
3,000
0%
2%
2%
Moderate
55

Haphazard

Required Assurance
Low
Moderate
High

10%
15
23
41

8%
21
30
60

Small Pop. Adjusted Sample Sizes


6%
27
37
74

No.

Suppliers

Inv no.

Inv date

Description

XIC ENTERPRISE

KN20150701l

7/14/2015

air blower

BAN LEK TIMBER & HARDWARE

KMPCV15/07/00CASH

7/24/2015

4pt elbow, socket, weser & pipe

XIC ENTERPRISE

KN20150801I

8/4/2015

air blower

PAKA REFRIGERATION & EQUIPMENT SDN BHD

1508/014

8/11/2015

temperature controller

KERTEH JAYA ENTERPRISE

KMPCV15/08/00CASH

8/17/2015

fuse, wiring cup & tape

BAN LEK TIMBER & HARDWARE

KMPCV15/08/00CASH

8/21/2015

socket

SUN YAT ELECTRICAL

KMPCV15/08/00CASH

8/31/2015

pvc nut box

LIAN HUP ELECTRICAL

KMPCV15/09/00CASH

9/9/2015

on off switch

RACO ELECTRICAL

KMPCV15/09/00CASH

9/30/2015

fan motor & thermostat

10

BAN LEK TIMBER & HARDWARE

KMPCV15/10/00CASH

10/6/2015

tape

11

BAN HEE HARDWARE & MACHINERY SDN BHD

KMPCV15/10/00CASH

10/21/2015

cable, heatshrink, led, glue, handle & hardware

12

STANDARD RAWANG BOLTS FASTENERS

KPMCV15/10/00CASH

10/30/2015

hex bolt & nut

13

BAN LEK TIMBER & HARDWARE

KPMCV15/11/00CASH

11/23/2015

glue

14

HOCK LEE HARDWARE SDN BHD

KMPCV15/11/OOCASH

11/23/2015

italy flexi hose

15

WAI KEE

INV01551

11/30/2015

jv-jh91 91 liter

16

SUN YAT ELECTRICAL

KMPCV15/12/00CASH

12/17/2015

elcb

17

RACO ELECTRICAL

KMPCV15/12/00CASH

12/17/2015

fan motor

18

BAN LEK TIMBER & HARDWARE

KMPCV15/12/00CASH

12/31/2015

s/s elbow

19

HOCK LEE HARDWARE SDN BHD

KMPCV15/12/00CASH

12/31/2015

pipe, elbow, socket, garden tap & tape

20

MR D.I.Y

KMPCV16/01/11CASH

1/15/2016

bracket

21

BAN LEK TIMBER & HARDWARE

KMPCV16/01/00CASH

1/15/2016

refill filter

22

BAN LEK TIMBER & HARDWARE

KMPCV16/01/00CASH

1/28/2016

glue, screw & screw bit

23

SUN YAT ELECTRICAL

KMPCV16/01/00CASH

1/28/2016

flexi cable & flexi tube

24

CKE HOLDINGS

KMPCV16/01/00CASH

1/31/2016

display warmer heater

25

LEXTON INDUSTRIAL SUPPLIES

INV11042

2/29/2016

p.u steering wheel & bearing

Page 1 of 10

26

BAN LEK TIMBER & HARDWARE

KMPCV16/02/00CASH

2/29/2016

lock for CFO

27

XIC ENTERPRISE

KN20160105l

2/29/2016

compressor

28

SUN YAT ELECTRICAL

KMPCV16/03/00CASH

3/7/2016

fuse unit & fuse link

29

SHELL

KMPCV16/03/00CASH

3/31/2016

diesel to fill up water pump

30

WINSON MACHINERY PARTS TRADING

KMPCV16/03/00CASH

3/31/2016

engine oil for truck

31

LIAN HUP ELECTRICAL

KMPCV16/03/00CASH

3/31/2016

on off switch

32

SUN YAT ELECTRICAL

KMPCV16/04/00CASH

4/8/2016

mcb for oven

33

GOLDEN EMINENT & PAINTS HARDWARE SDN


BHD

KMPCV16/04/00CASH

4/15/2016

silicone sealant

34

XIC ENTERPRISE

KN20160401l

4/16/2016

defect temp controller

35

CBN STAINLESS

KMPCV16/04/00CASH

4/27/2016

nipple

36

NASAMAS ELECTRONICS SDN BHD

KMPCV16/04/00CASH

4/30/2016

3mm sleeving & 220V lamp

37

XIC ENTERPRISE

KN20160501l

5/10/2016

oven temperature controller

38

BAN LEK TIMBER & HARDWARE

KMPCV16/05/00CASH

5/27/2016

sand paper & superglue

39

STANDARD RAWANG BOLTS FASTENERS

KMPCV16/05/00CASH

5/27/2016

screw for office door

40

WELLER AIR-COND PARTS ENTERPRISE SDN


BHD

KMPCV16/05/00CASH

5/31/2016

contactor, mcb, plc tube

41

STANDWELL

KMPCV16/06/00CASH

6/17/2016

shrink heat tube & snap bushing

42

BAN HING HARDWARE SDN BHD

KMPCV16/06/00CASH

6/25/2016

fire extinguisher bomba bracket

43

HOCK LEE HARDWARE SDN BHD

KMPCV16/06/00CASH

6/30/2016

wall mounted sink tap

44

ROTIBOY BAKESHOPPE

56990

1/21/2016

display warmer showcase

45

TAI TONG KITCHEN & EQUIPMENT

0000427

4/1/2016

2 units chest freezer (LY600LD)

46

CKE HOLDINGS

CBK1605011

5/4/2016

2 door display chiller

47

CHARTOLE ENTERPRISE

0020160404

4/4/2016

baking tray

48

CKE HOLDINGS

CBK1604007

4/2/2016

sink table

49

CKE HOLDINGS

CBK1604051

4/12/2016

exhaust hood

50

NIA MEGA RESOURCES

B16-011

4/5/2016

stainless steel table

Total samples selected (NON-STATIST

Results
No exceptions were noted in the sample selected.
Except for the audit adjustment passed for supplier invoices not taken up, no other exeption noted from sample selected. Thus, no further testing performed for purchases.

Conclusion
No other exception noted.

Page 2 of 10

COS

ting documents for the transactions.

d Sample Sizes
4%
32
45
89

Quantity

3%
35
49
97

Unit price (RM)

RM
380.00
22.17
380.00
640.00
20.99
3.21
2.00
24.06
195.99
1.13
191.03
4.01
7.55
18.92
913.02
305.99
239.01
4.25
27.69
1.60
2.83
20.57
30.99
140.00
264.00

Page 3 of 10

al samples selected (NON-STATISTICAL TESTING) :

37.74
900.00
11.42
20.00
10.00
12.26
88.49
6.13
(230.00)
3.49
18.11
460.00
5.75
4.81
555.99
12.08
11.98
58.02
4,800.00
3,160.00
3,350.00
625.00
1,500.00
4,800.00
425.00
24,487.28

or purchases.

Page 4 of 10

CHIANG & CO. (AF 0147)


KINO MACHINERY SALES & SERVICES SDN. BHD.
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016
Materiality computation

Objective : To determine the materiality level for application to the audit as a whole.

Turnover
Total assets
Profit/(Loss) before tax
Adjustments for unusual items
Adjustments profit/(loss)

* Turnover x 1.5%
* Total assets x 1%
Adjusted profit/(loss) x 10%

OVERALL MATERIALITY LEVEL

PERFORMANCE MATERIALITY LEVEL


(after 25% haircut from overall materiality)

SUD POSTING LEVEL


(10% of overall materiality)

Comments
This is a profit making company active in manufacturing, wholesaling and retailing of all kinds of food and beverages.
In view that PBT is too low, we have opted to use turnover as the basis to determine materiality.
Conclusion
The performance materiality level of RM54,000 is reasonable to allow the engagement team to achieve the following :- ensures that the audit is focused to significant areas and therefore less attention will be given to insignificant items
- the nature and extent of audit procedures will be more effective.

I am satisfied that the figure determined above represents appropriate audit materiality level.

* Criteria for setting materiality levels.


RM
0 - 500,000
500,001 - 1,000,000
1,000,001 - 2,000,000
2,000,001 - 5,000,000
Over 5,000,000

Profit before
taxation

10%

Turnover and
total assets
3.00%
2.50%
2.00%
1.50%
1.00%

MATERIALITY

2016
RM
279,545
231,155

4,193
2,312
-

4,000

3,000

400

Materiality limit range


RM
0 - 15,000
15,000 - 25,000
25,000 - 40,000
40,000 - 75,000
75,000 and over

CHIANG & CO. (AF 0147)


KINO MACHINERY SALES & SERVICES SDN. BHD.
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

REVENUE - CUT OFF TEST


Objective :
Population to be tested :
Definition of Exception :
Level of Assurance Required :
Basis for Selection :

To obtain evidence that there is proper cut off for revenue recognition
Last five (5) sales invoices in FY 2016 and first five (5) sales invoices in FY 2017.
Exceptions exist where the sales is recognised in the wrong period.
We determined that we need a HIGH level of assurance from targeted testing as no
reliance is placed on controls.
ALL sales invoices issued within our population period are selected to achieve a 100%
coverage.

Invoice Date

Invoice No.

DO No.

Customers

6/24/2016

1819

1819

ROTIBOY BAKESHOPPE SDN BHD

6/25/2016

1820

1820

ROTIBOY BAKESHOPPE SDN BHD

FY 2016

7/1/2016

1821

1821

RB PAVILION SDN BHD

6/27/2016

1822

1822

RADICAL VANTAGE SDN BHD

6/30/2016

1823

1823

ROTIBOY BAKESHOPPE SDN BHD

Cut-Off Date @ 30.06.2016


FY 2017

Conclusion :

7/12/2016

1824

1824

RB SETIA SDN BHD

7/12/2016

1825

1825

RADICAL VANTAGE SDN BHD

7/1/2016

1826

1826

RADICAL VANTAGE SDN BHD

7/1/2016

1827

1827

RADICAL VANTAGE SDN BHD

7/5/2016

1828

1828

RADICAL VANTAGE SDN BHD

The sales invoice is filed in accordance to the invoice number and the cut-off is in order.
Therefore, suggest no further work done.

REVENUE

Amount
RM

Record in GL
correctly ?
Y/N

715.50

316.94

134.82

318.00

63.60

203.52

198.22

180.20

236.38

468.52