100 / 204
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 control 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 control to customers;
(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.
Review of costing of inventories
(Refer to Note 19 to the financial statements)
Included in the Group’s inventories as at 31 March 2019 is work-in-progress amounting to approximately RM33
million derived from the Group’s production and trading of security and confidential documents segment. The
Group uses standard costing in measuring its work-in-progress, which includes an element of estimation in the
allocation of overhead costs. We considered this to be a key audit matter given the level of judgements involved in
determining the cost of inventories and the magnitude of the work-in-progress balance.
As part of our audit, we performed the following:
(a) Obtained an understanding of management’s process in the application of standard costing in measuring its
work-in-progress, including the allocation of overhead costs;
(b) We tested the costing on samples of work-in-progress by examining and recomputing the elements which
made up the standard cost; and
(c) Assessed the general and logical access controls surrounding the data input process of the inventory system
and the accounting system by involving our IT audit professionals.
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
To the members of Fima Corporation Berhad
96
Fima Corporation Berhad
(21185-P)
Annual Report 2019