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F I N A N C I A L S TAT E M E N T S
Key Audit Matters (Cont’d.)
Revenue recognition (Cont’d.)
(Refer to Note 3 to the financial statements)
As part of our audit, we performed the following procedures to address the possible cause of revenue misstatement, particularly in
respect of the timing and amount of revenue recognised:
(a)
Obtained an understanding of the Group’s relevant internal controls and tested the controls over timing and amount of
revenue recognised;
(b)
Inspected the terms of significant sales contracts to determine the point of transfer of significant risk and rewards;
(c)
Inspected documents evidencing the delivery of goods to customers; and
(d)
Tested the recording of sales transactions close to the year end, including credit notes issued after year end, to establish
whether the transactions were recorded in the correct accounting period.
Provision for warranty
(Refer to Note 31 to the financial statements)
As at 31 March 2018, the provision for warranty amounted to RM10.0 million. The Group provides warranty for defective travel
documents and licenses for a specified period or term. The Group assessed the provision for warranty based on the estimated
replacement costs to be incurred for the defective products during the warranty periods. The costs are estimated based on historical
rate of return of the defective products. Given the significant judgement involved in management’s assessment, we identified the
provision for warranty to be an area of audit focus.
As part of our audit, we performed the following:
(a)
Obtained an understanding of the Group’s warranty estimation process;
(b)
Assessed the reasonableness of the provision for warranty by comparing with the average historical rate of return of the
respective products. Our audit procedures, included amongst others, evaluating the validity of the historical data used to
determine the rate of return and performing test of details on the historical products claims; and
(c)
Recomputed the management’s calculation of the provision for warranty.
Information other than the financial statements and auditors’ report thereon
The directors of the Company are responsible for the other information. The other information comprises the information included in
the annual report, but does not include the financial statements of the Group and of the Company and our auditors’ report thereon.
Our opinion on the financial statements of the Group and of the Company does not cover the other information and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial statements of the Group and of the Company, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the financial statements of the
Group and of the Company or our knowledge obtained in the audit or otherwise appears to be materially misstated.
Independent auditors’ report
t o t h e m e mb e r s o f F i m a C o r p o r at i o n B e r h a d