Common Pitfalls

Common Pitfalls
• Prepaid Expense
Х Vouching ending balance of prepaid only
 Movement of Prepaid
 Test of detail of prepaid addition for the year
 Test amortization
• Scoping FSLI to be tested
Х Full testing of belom PM FSLI (kalo yg scope out description of nature transaction)
 Agree listing and scanning
Х All below PM FSLI, to be scope-in as unpredict testing
• Trade Receivables
 Distinguish purpose of subsequent receipts as alternative and subsequent receipts for test allowance
 Documentation of reconciliation AR difference. Decide which balance is right

• Intercompany
Х Redundant documentation (e.g Test Confirmation Other AR also Test Confirmation in Intercompany)
 Documentation in Intercompany working paper, other area refer to intercompany working paper (kalo
banyak bikin satu wp aja)
• Sample selections
Х Focussing in above PM and NSS
 Think alternative (e.g above SUM, Untested below PM, Documentation in Intercompany working paper,
unit of sampling). Consider samples to be as minimum as possible.
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Common Pitfalls
• Attribute Testing
Х Same attribute testing for TOD, TOC, Cut-Off
 Distinguish attribute testing based on each Purpose of testing
• Taxation
Х No need to vouching every month for every tax article
 Vouching every month for testing reconciliation of DPP (VAT and PPh 21)
 Documentation of reconciliation item of tax. Describe whether the reconciliation item is reasonable or not
• PMPJ
 Confirm to admin as soon as possible. Not when finalisasing of report
• Independence
 Ensure the year of signing partner in engagement is the same as in Opinion number. Confirm to admin.

• Summary Minutes of Meeting and Significant Contract

Х Redundant documentation
 Documentation in each area. Refer to those area.
e.g. summary of notarial deed in Equity working paper. Refer the summary of notarial deed to Equity
working paper. Bank loan agreement refer to Bank Loan Agreement
• Risk Assessment Analytics (RAA) and Overal Conlusion Analysis (OCA)
 Proper assessment whether the increase or decrease is Yes or No in unusual or unexpected Column.
Documentation in each area. Refer to those area.
3
Common Pitfalls
• Attribute Testing
Х Same attribute testing for TOD, TOC, Cut-Off
 Distinguish attribute testing based on each Purpose of testing
• Taxation
Х No need to vouching every month for every tax article
 Vouching every month for testing reconciliation of DPP (VAT and PPh 21)
 Documentation of reconciliation item of tax. Describe whether the reconciliation item is reasonable or not
• PMPJ
 Confirm to admin as soon as possible. Not when finalisasing of report
• Independence
 Ensure the year of signing partner in engagement is the same as in Opinion number. Confirm to admin.
• Summary Minutes of Meeting and Significant Contract
Х Redundant documentation
 Documentation in each area. Refer to those area.
e.g. summary of notarial deed in Equity working paper. Refer the summary of notarial deed to Equity working paper.
Bank loan agreement refer to Bank Loan Agreement
• Risk Assessment Analytics (RAA) and Overal Conlusion Analysis (OCA)
 Proper assessment whether the increase or decrease is Yes or No in unusual or unexpected Column.
Documentation in each area. Refer to those area.
 Develope expectation properly based on economic conditions, clients condition for the year etc.
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Common Pitfalls
• Risk of Material Misstatements
Х Not update TOC
Х Many level of TOD is set as Medium
 Default of high risk for Revenue Recognition (for Existence/Occurance (E/O) and Cut-Off (CO) assertions) and
Management Override Control. High risk for other area, discuss with DiC
 Discuss the procedures
• SURL/Cut-Off
 Documentation Extent properly
 Unproper document for cut-off/SURL (e.g basis for recognition of revenue in Cut-Off testing is Signed DO by
Customers. Therefore only Signed DO Customers need to be documented. No need PO
• Interim Documentation
 Direct documentation for final (e.g documentation of period is 31 December 202X, not 30 September 202X. Except
some clients that expected interim delivarables
• Reconciling item
 Descibe the nature of reconciling item, whether the reconciling item is reasonable or not
• Scoping expense
 Ensure the scope-out expense is tested in other area.
• Working Paper Documentation
Х No preparer, reviewer signed-off in Working Paper
Х Sign-off Dated prior opinion date
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Common Pitfalls
• Inventories
Х Incorrect formula of quantity rollback and rollforward