SAP Revenue Audit Program by b1w565l3

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									Key Risks

I.    Order Process

      1.    Segregation of duties
      2.    Mandatory fields on the order form such as:
             Vendor’s PO number to identify duplicate orders
             Terms of payment
             Accounting information
       3.   Type of Order and Controls such as:
             Credits and returns – blocking of the return until approved in the IMG.
      4.    Pricing
             Can anyone override the price computed?
             Can anyone give an unlimited discount?
      5.    Billing
             Any billing blocks?
             Any shipped but not yet billed?
             Partial shipment report
      6.    Credit Master
             Customer
             Credit rating
             Credit limits
             Segregation of duties
             Credit check
                 Sales Order check
                 Pick check
                 Ship check
      7.    Who can execute the FB01 transaction?
             No connection to the sales order process
      8.    Delivery Returns
             Reason for the return

II.   Procurement

      1.    Purchase Request
             Segregation of duties
             Release procedure
      2.    Purchase Order
             Segregation of duties
             Release procedure
      3.    Invoice document
             Segregation of duties
      4.    Receipt document
             Segregation of duties
       5.      Release for payment
                Release procedure
                Tolerances for
                   Price
                   Quantity
                   Volume

III.   Inventory

       1.      Inventory Movements
       2.      Cycle counting
       3.      Inventory adjustments


IV. GR/IR Clearing Accounts
The goods receipt/invoice receipt reconciliation account is an intermediate account
between the inventory account and the vendor account, in which the goods receiving can
first be recorded, or the invoice receiving for an order can first be recorded. In the first
case, the posting offsets the invoice, and in the second, the posting of the goods receipt
offsets the GR/IR reconciliation account.
When posting the goods receipt, the system performs the following account movements:
The value of the delivery is credited to the inventory account (net order price * quantity
of goods received), and the GR/IR reconciliation account is debited by that amount.
When the corresponding goods receipt or invoice receipt is posted, the balance is then
offset in the GR/IR reconciliation account account and posted to the vendor account.
account.
If a later invoice or goods receiving remains outstanding, the balance is not offset in the
GR/IR reconciliation account; that is, the system waits for an additional goods receipt or
an additional invoice that offsets that balance. If this remains outstanding, the GR/IR
reconciliation account has to be balanced manually. A corresponding function is included
in invoice verification. The GR/IR reconciliation account must be maintained at regular
intervals.
By posting the receipt of goods using a GR/IR reconciliation account, the recalculation of
the average escalation price is handled at the level of the material master data set and the
order obligation is adjusted, among other things. The detailed information on the GR/IR
reconciliation account is needed for the balance sheet date, in order to incorporate it as
goods in transit or invoice in transit, and to assign it to the appropriate balance sheet
items.

1. Tables
T169 Transaction control, Invoice verification/ valuation
T169W Posting strings (values) for SAPMM08R
2. Reports
RFWERE00 Analysis of goods receipt/invoice receipt
reconciliation accounts and statement of profits tax
RM07MSAL Goods receipt/invoice receipt trial balance
SAPF123W Automatic balancing of goods receipt/invoice receipt
reconciliation accounts
RMCBBW00 Overall analysis of inventory values
RMCBBW10 Hit list of inventory values
3. Handling price differences
Since the material was charged according to the order price when the goods were
received, if there is a difference in the invoice price, the total must be reduced (lower
invoice) or increased (higher invoice price) during invoice verification.
The following must be noted in terms of posting:
For materials with an average escalation price, the inventory account can only be charged
or credited in accordance with the actual inventory. If the material inventory is smaller
than the invoice quantity, the inventory account can only be credited or debited with the
invoice difference for the actual inventory (inventory * price difference); the remaining
amount is posted to a price difference account.
For materials with a standard price, this posting is handled in the expenditure from price
difference account.
4. Tables
T169 Transaction control, invoice verification/ valuation
T169A Posting string: invoice verification
T169B Notifiable order appendix types
T169D Invoice verification: verification of order amounts
T169E Tolerance threshold key
T169F Transaction-dependent recommendation values: invoice
verification
T169G Tolerance thresholds: invoice verification
T169K Recommendation values: account management
T169O Accounting block: fields to be excluded in invoice
verification
T169P Invoice verification parameters
T169S Tolerance threshold key
T169V Recommendation values: invoice verification
T169W Posting strings (values) for SAPMM08R
T169X Procedure texts for invoice verification
5. Handling differences in quantity
When there are differences in quantity between goods receipt and invoice receipt for an
order, a balance appears in the goods receipt/invoice receipt reconciliation account:
If the invoiced quantity is greater than the goods receipt quantity, additional receipts of
goods are expected for that order, with which the balance will be offset.
If the quantity of goods received is greater than the invoice quantity, additional invoices
are expected for that order, with which the balance will be offset.
If there are not further goods or invoices received for the order, the goods receipt/invoice
receipt balance must be offset, e.g. by returning excess goods received to the vendor,
discounting the invoice, or by directly offsetting the goods receipt/invoice receipt
reconciliation account. As a general rule, the goods receipt/invoice receipt reconciliation
account is balanced
periodically or at the end of the fiscal year. The offseting posting of the goods
receipt/invoice receipt reconciliation account corresponds to the posting made when the
invoice was recorded for the order.

.Materials with an average escalation price:
An offsetting entry is made in the inventory account, unless there is
no inventory coverage. If the material inventory is smaller than the
amount to be offset, only the inventory actually on hand is
proportionally credited or debited; the residual amount is posted to
an expense or earnings account.

Materials with a standard price
The offsetting posting is handled in an expense or earnings account.

.Allocated orders
Counter-booking is handled in the cost or fixed-asset account in which
the invoice was posted.

Goods receipt/invoice receipt trial balance
The report compares the quantity and value of goods received for an order to the quantity
and value of the invoice received for that order if the balance of the quantities is not equal
to zero. The report is used to provide an overview of the goods and invoices received
when purchasing vouchers are not counterbalanced.
Depending on the settings for the scope of the list, you will obtain the following lists
(Environment -> Balance statement -> Goods Receipt/Invoice receivpt trial balance;
RM07NSAL):
Basic list
Summary page
The selected purchasing vouchers are provided by supplier in the basic
list. The following details are presented for each purchasing voucher
item: item number, order quantity, order quantity units, net
price, price unit, order price quantity unit, material, quantity
received, invoice amount, goods received value, face amount of invoice
in the domestic currency, and, if available, the quantities received,
the invoice quantity, the value of goods received and the face value
of invoice in domestic currency for additional supply costs.
You can perform various functions starting with the basic list:

.Display order history,
.Display summary page.
On the summary page, the total value of goods received, the face
value of the invoice in the local currency and, if available, the
additional supply costs for all purchase vouchers selected can be
indicated by supplier, by purchasing group, and per purchasing
organization.
As additional information with respect to the basic list, this summary page displays the
difference in value of goods received and the face value of the invoice in the local
currency, and the difference in additional supply costs.
1.0   Introduction
2.0   Procurement Audit

      2.1   List all of the organizational entities for Procurement
            2.1.1 Use
                    2.1.1.1 Transaction SPRO – IMG
                    2.1.1.2 Transaction SECR – AIS Business Audit –
                            Organization
                    2.1.1.3 Transaction SE17
                                   Determine the production Client
                                          List table T000
                                   Determine the production Companies
                                          List table T001
                                   Obtain a listing of all group companies
                                          List table T042G
                                   Obtain a listing of all business areas
                                          List table TGSB and TGSBT
                                   Obtain a listing of all credit control areas
                                          List table T014 and T014T
                                   Obtain a list of all charts of accounts
                                          List table T004 and T004T
                                   Obtain a listing of all plants
                                          List tables T001W and TVKWZ
                                   Obtain a listing of storage locations
                                          List table T001L
                                   Obtain a listing of all purchasing organizations
                                          List table T024W
                                   Obtain a listing of all purchasing groups
                                          List table T024
                                   Obtain a listing of all sales organizations
                                          List table TVKO and TVKOT
                                   Obtain a listing of distribution channels
                                          List table TVTW, TVTWT, and TVKOV
                                   Obtain a listing of all divisions
                                          List tables TSPA, TSPAT, and TVKOS
                                   Obtain a listing of sales areas
                                          List table TVTA
                                   Obtain a listing of sales offices
                                          List tables TVBUR, TVKBT, and TVKBZ
                                   Obtain a listing of sales groups
                                          List tables TVKGR, TVBVK, and TVGRT
                                   Obtain a listing of activity codes
                                   List tables TACT and TACTZ
                            Obtain a listing of transaction codes
                                   List table TSTCT
                            Obtain a listing of tables
                                   List table DD02T
                            Obtain a listing of all reports using SA38
2.2   Obtain a copy of the Business Process Diagrams for the business audit
      areas
2.3   Obtain the documentation on all configuration changes
2.4   Determine the amount of system modification
      2.4.1 List the following:
              2.4.1.1 SE17 on TSTCT selecting Z* transactions
              2.4.1.2 SA38 and selecting Y* and Z* programs
2.5   Is system limited to people who need access?
      2.5.1 Obtain a copy of the Matrix analysis
      2.5.2 Review the Matrix Activity Groups for Procurement
      2.5.3 Review the key transactions to job functions
      2.5.4 Map the Matrix to the Activity Group in the system
              2.5.4.1 Transaction SUIM
2.6
Vendor Selection

1.   How do you ensure a supplier is evaluated on the following factors before that
     supplier is utilized?

     Price competitiveness
     Reputation
     Quality of products/services
     Delivery abilities
     Overall capabilities

2.   Who has the transaction authority to create and/or change Vendor Master
     records.
Purchasing

1.   The system should be configured to ensure that purchase orders cannot be
     created without an existing purchase requisition.
2.   Evaluate the key fields on purchase orders to ensure that they are defined as
     mandatory items. In the IMG – Material Management > Purchasing >
     Purchase Order Processing > Define Screen Layouts at Document Level.
3.   Determine that the release procedures for purchase requisition are adequate.
     In the IMG – Materials Management > Purchasing > Purchase Requisition >
     Release Procedures
4.   Determine that the three way release strategy is in place where a purchase
     order, invoice, and delivery document are matched. In the IMG – Materials
     Management > Purchasing > Purchase Order Processing > Define Release
     Procedures.
5.   Review the tolerance level settings for price and quantity. Determine if these
     tolerance levels are appropriate. In the IMG – Materials Management >
     Purchasing > Purchasing Order Processing > Set Tolerance Limits for Price
     Variance
6.   Other key configuration settings in the IMG – Materials Management >
     Purchasing > Purchasing Order Processing:

        Define Number Ranges
        Define Document Types

7.   How do you ensure that purchase order overrides are authorized?
Receiving

1.   How do you know that goods received meet your Company’s quality standards?

2.   How would you know if a change or deletion to a receiving report occurred?

3.   How are mismatched or long outstanding, open purchase orders and receiving
     reports investigated and resolved?
Supplier Invoices and Disbursements

1.   Can the individual(s) who prepares and processes disbursements:
      Approve disbursements?
      Receive and process cash receipts?
      Access blank checks and facsimile plates?
      Process wire transfers?
      Have petty cash custodial duties?
      Prepare and approve bank reconciliations?
      Record transactions in the general ledger or accounts payable subsidiary
        ledger?
Accounts Payable

1.   How do you know that duplicate payments have not been made on the same
     supplier invoice?

2.   How do you know that payments against blanket purchase orders used for
     recurring purchase transactions are authorized?
Blank Checks

1.   How do you prevent someone from taking a blank check and completing it for
     their own purposes?
Purchase Returns and Adjustments to Accounts Payable Subsidiary

1.   How do you ensure that every purchase return, allowance and other adjustment
     is authorized?

2.   How do you know that every debit memo, allowance and other adjustment was
     accurately and correctly recorded?

4.   How do you know that the amount of the debit memo reflects the original
     purchase price?
                        Test 04 - Open Receiving Report Test

________________________________________________________________________
_____


Purpose:    Review the Company's open receiving reports currently existing in the
            systems. Determine that no long outstanding open receiving exist in the
            systems.

Source:     SAP System

            Menu : Logistics --> Materials Management --> Purchasing -->
            Purchase Order --> List Display --> By Vendor

            Factors:      1.   Purchasing Organization   xxxx
                          2.   Scope of List                     ALL
                          3.   Selection Parameters      Open_GR
                          4.   Purchasing Group          xxx
                          5.   Plant                     xxxx
                          6.   Delivery Date             (to) dd/mm/yyyy
                          7.   Document Date             (to)dd/mm/yyyy

Findings:
                      Test 05 - Open Purchase Order Test

________________________________________________________________________
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Purpose:   Review the Company's open PO reports currently existing in the systems.
           Determine that no long outstanding open POs exist in the systems.

Source:    SAP System

           Menu Pass: Logistics --> Materials Management --> Purchasing -->
           Purchase Order --> List Display --> By Vendor

           Factors:      1.   Purchasing Organization   xxxx
                         2.   Scope of List                    PO
                         3.   Selection Parameters      INV_OPEN
                         4.   Purchasing Group          xxx
                         5.   Plant                     xxxx
                         6.   Delivery Date             (to) mm/dd/yyyy
                        Test 07 - Duplicate Invoice Test

________________________________________________________________________
_____

Purpose:    To ensure that no duplicate invoices were paid, and periodic review was
            perform by the Company's management.


Scope:      Review from mm/dd/yyyy        to mm/dd/yyyy     SAP system generated
            duplicate invoice report.

Source:     SAP generated system report

Menu Path: Accounting --> Financial accounting --> Accounts payable -->
           Periodic processing --> Payments --> Edit --> Payment --> Payment
           list and Exception list.

            Transaction Code:    SA38
            Program:             RFBNUM10

            Short-cut by using the program name:

            System --> Services --> Reporting

            Under Program Name: RFBNUM10

            Click on the Green Check Mark

            Company Code:        xxxx
            Posting period:      mm/dd/yyyy to mm/dd/yyyy
            Mark on:             Same Vendor
                                 Same Invoice

            Execute (to get the report)
                       Test 08 - Access Test for Open P.O.

________________________________________________________________________
_____

 Purpose:   To ensure that individuals who have access to purchase orders are current
            employees and have the required access to perform their current job
            responsibilities.

 Source:    SAP system

 Scope:     Obtained queries from the SAP system of all employees with access to
            critical transactions.

 SAP Menu Path:

            SUIM

            1)     Object Class:
                   MM Purchasing

                   Object:      M_EINK_FRG
                   Release Code and Group in Purchasing

                   Possible Authorization:


                   Definition:
                   This is critical because anyone who is given * and * access
                   to this can release purchase requisitions.

                   Critical Fields:
                           -Release Group
                           -Release Code




            2)     Object Class:
                   MM Purchasing

                   Object:       M_BANF_FRG
                   Release code in purchase requisition
                       Definition:
                       With this authorization object, it is possible to restrict the
                       release of purchasing documents via the release. This
                       authorization object comprises the field release code only.
                       The various authorizations for this object thus stipulate the
                       release codes with which requisitions may be released.

                       This is critical because these codes tell you if the system
                       automatically routes purchase requisitions to the next
                       level for approval. It also specifies the person to whom
                       the purchase requisition is routed. The text on the right
                       side of the screen will list the hierarchy for each level.
                       Please refer to company model documentation for a
                       description of each code.

                       Critical Fields:
                               -Release Code

                       Non-Critical Objects: Updating backorders:

                       Object Class: MM: Materials Requirement Planning

                       Object:      M_MIPA_ORG
                       Backlog Processing

                       Definition:
                       Authorization for updating backorders.

                       Critical Fields:
                       You can specify values for the following fields:
                       Activity:
                               02           Update.

Procedures:
1. Check all authorizations & profiles linked to the critical authorization objects.
2. Review the individual's established user role to ensure access is required to
   complete job responsibilities based on job title and department.
                    Test 09 - Access Test for Goods Receipts

________________________________________________________________________
_____


 Purpose:   To ensure that individuals who have access to goods receipt transactions
            are current employees and have the required access to perform their
            current job responsibilities.

 Source:    SAP system

 Scope:     Obtained queries from the SAP system of all employees with access to
            critical transactions.

 SAP Menu Path:

            SUIM

            1)     Object Class:
                   MM: Inventory Management and Physical Inventory

                   Object:    M_MSEG_BWA
                   Goods Movement: movement type

                   Definition:
                   With this authorization object, it is possible to restrict the
                   maintenance of goods movements via the movement type.

                   Critical Fields:
                   You can specify values for the following fields:
                   -Activity:
                           01     Create

            2)     Object Class:
                   MM: Inventory Management and Physical Inventory

                   Object:     M_MSEG_BWA
                   Goods Receipt against purchase order: Movement Type

                   Definition:
                   With this authorization object, it is possible to restrict the
                   maintenance of goods movements with reference to PO's
                   via the movement type.
                      Critical Fields:
                      You can specify values for the following fields:
                      -Activity:
                              01     Create
                              02     Change
                      -Movement Type



               3)     Object Class:
                      MM: Inventory Management and Physical Inventory

                      Object:     M_MSEG_WWE
                      Goods Receipt against purchase order: Plant

                      Definition:
                      With this authorization object, it is possible to restrict the
                      maintenance of goods movements with reference to POs
                      via the plant.

                      Critical Fields:
                      You can specify values for the following fields:
                      -Activity:
                              01     Create
                              02     Change
                      -Movement Type

               4)     Object Class:
                      MM Purchasing

                      Object:
                      Purchasing Organization in Purchase Order


Procedures:
1. Check all authorizations & profiles linked to the critical authorization objects.
2. Review the individual's established user role to ensure access is required to complete
job responsibilities based on job title and department.
                        Test 10 - Access Test for Goods Returns

________________________________________________________________________
_____

 Purpose:     To ensure that individuals who have ability to return goods are current
              employees and have the required access to perform their current job
              responsibilities.

 Source:      SAP system

 Scope:       Obtained queries from the SAP system of all employees with access to
              critical transactions.

 Menu Pass:
              SUIM

              Object Class:
                              MM: Inventory Management and Physical Inventory

              Object:         M_MSEG_BWA
                              Goods Movement: movement type

              Definition:
              With this authorization object, it is possible to restrict the maintenance of
              goods movements via the movement type.

              Critical Fields:
              You can specify values for the following fields:
              -Activity:
                             01    Create
                             02    Change
              -Movement Type


 Procedures:
 1. Review the individual's established user role to ensure access was required to
    complete job
 responsibilities based on job title and department
                        Test 10 - Access Test for Goods Returns

________________________________________________________________________
_____

 Purpose:     To ensure that individuals who have ability to return goods are current
              employees and have the required access to perform their current job
              responsibilities.

 Source:      SAP system

 Scope:       Obtained queries from the SAP system of all employees with access to
              critical transactions.

 Menu Pass:
              SUIM

              Object Class:
                              MM: Inventory Management and Physical Inventory

              Object:         M_MSEG_BWA
                              Goods Movement: movement type

              Definition:
              With this authorization object, it is possible to restrict the maintenance of
              goods movements via the movement type.

              Critical Fields:
              You can specify values for the following fields:
              -Activity:
                             01    Create
                             02    Change
              -Movement Type


 Procedures:
 1. Review the individual's established user role to ensure access was required to
    complete job
 responsibilities based on job title and department
                 Test 11 - Access Test for Releasing Blocked Inv.

________________________________________________________________________
_____


 Purpose:   To ensure that individuals who have access to release blocked invoices are
            current employees and have the required access to perform their current
            job responsibilities.

 Source:    SAP system

 Scope:     Obtained queries from the SAP system of all employees with access to
            critical transactions.

 SAP Menu Path:

            SUIM

            1)     Object Class:
                   MM: Invoice Verification

                   Object:       M_RECH_SPGAL
                   Invoices: Blocking Reasons

            Definition:
            With this authorization object, you can limit who can process blocked
            invoices via the individual blocking reason. This authorization is checked
            against the function 'Release blocked invoices'

            Critical Fields:
            You can specify values for the following fields:
            -Activity:
                           02    Release/cancel invoice block
            -Blocking Reason
                           ADD IN blocking reason info

            2)     Object Class:
                   MM: Invoice Verification

                   Object:      M_RECH_BUK
                   Invoices: Company Code

            Possible Authorization:
               Definition:
               Authorization to release blocked invoices in certain company
               codes. This authorization is checked against the function Release
               blocked invoices

               Critical Fields:
               You can specify values for the following fields:
               -Activity:
                              02    Release/cancel invoice block
               -Company Code

Procedures:
1. Check all authorizations & profiles linked to the critical authorization objects.
2. Review the individual's established user role to ensure access is required to complete
job responsibilities based on job title and department.
                    Test 12 - Access Test for Invoice Process

________________________________________________________________________
_____

 Purpose:   To ensure that individuals who have access to process invoices are current
            employees and have the required access to perform their current job
            responsibilities.

 Source:    SAP system

 Scope:     Obtained queries from the SAP system of all employees with access to
            critical transactions.

 SAP Menu Path:

            SUIM

            1)     Object Class:
                   MM: Invoice Verification

                   Object:       M_RECH_SPGAL
                   Invoices: Blocking Reasons

            Definition:
            With this authorization object, you can limit who can process blocked
            invoices via the individual blocking reason. This authorization is checked
            against the function 'Release blocked invoices'

            Critical Fields:
            You can specify values for the following fields:
            -Activity:
                           02    Release/cancel invoice block
            -Blocking Reason
                           ADD IN blocking reason info


            2)     Object Class:
                   MM: Invoice Verification

                   Object:      M_RECH_BUK
                   Invoices: Company Code

            Possible Authorization:
               Definition:
               Authorization to release blocked invoices in certain company
               codes. This authorization is checked against the function Release
               blocked invoices

               Critical Fields:
               You can specify values for the following fields:
               -Activity:
                              02    Release/cancel invoice block
               -Company Code


Procedures:
1. Check all authorizations & profiles linked to the critical authorization objects.
2. Review the individual's established user role to ensure access is required to complete
job responsibilities based on job title and department.
                   Test 14 - Access Test for Vendor Master File

________________________________________________________________________
_____

 Purpose:   To ensure that individuals who have access to vendor master file are
            current employees and have the required access to perform their current
            job responsibilities.

 Source:    SAP system

 Scope:     Obtained queries from the SAP system of all employees with access to
            critical transactions.

 SAP Menu Path:

            SUIM

            1.      Object Class: MM: Purchasing

                    Object:     V_KONH_EKO
                    Purchasing Organization in Master Condition

            Possible Authorization:

            Definition:
            With this authorization object, it is possible to restrict the
            maintenance of master conditions. Master conditions are the basis
            on which the system computes the effective price.

            Critical Fields:
            Activities:
                    01              Create
                    02              Change

            2.      Object Class: MM: Purchasing

                    Object:     M_LFM1_EKO
                    Purchasing Organization in Vendor Master Record

            Definition:
            With this authorization object, it is possible to restrict the
            maintenance of vendors via the purchasing organization.

            Critical Fields:
Activity
       01             Create

3.     Object Class: Financial Accounting

      Object:     F_KREDITOREN
      Accounting Document: Account Authorization for
Vendors

Possible Authorization:


Definition:
Using this authorization object, you determine for which vendor
accounts line items can be posted and processed.

Critical Fields:
Activity
        01            Create

4.     Object Class: Financial Accounting

       Object:
       Vendor: Account Authorization

Definition:
Using this authorization object, you determine which vendor
master records can be edited.

Critical Fields:
Activity
        01            Create

5.     Object Class: Financial Accounting

       Object:     F_LFA1_APP
       Vendor: Application Authorization

Possible Authorization:


Definition:
Using this authorization object, you determine which activities are
allowed for vendor master records. You can define this
authorization separately for FI and Purchasing applications. If an
               employee is allowed to edit the master data for both applications,
               then he or she needs the authorization for both applications.

               Critical Fields:
               Activity
                       01            Create

               6.     Object Class: Financial Accounting

                      Object:     F_LFA1_AEN
                      Vendor: Change Authorization for Certain Fields

               Possible Authorization:

               Definition:
               Using this authorization object, you can define a change
               authorization for selected vendor master file records. Using this
               object, you can also protect the fields from being blocked and the
               delete flag from being set. Only an employee who has been
               allocated this authorization can change these fields.

               Critical Fields:
               Activity
                       01            Create

               7.     Object Class: Financial Accounting

                      Object:     F_LFA1_BUK
                      Vendor: Authorization for Company Codes

               Possible Authorization:

               Definition:
               Using this authorization object, you determine which activities are
               allowed in the company code-dependent area of the vendor master
               record.

               Critical Fields:
               Activity
                       01            Create

Procedures:

1. Check all authorizations & profiles linked to the critical authorization objects.
2. Review the individual's established user role to ensure access is required to complete
job responsibilities based on job title and department.
                   Test 15 - Access Test for Payment Process

________________________________________________________________________
_____

 Purpose:   To ensure that individuals who have access to payment process are current
            employees and have the required access to perform their current job
            responsibilities.

 Source:    SAP system


 Scope:     Obtained queries from the SAP system of all employees with access to
            critical transactions.

 SAP Menu Path:

            SUIM

            1.     Object Class: Financial Accounting

                   Object:     F_REGU_KOA
                   Vendor: Automatic Payment: Operation Authorization
                   for Account

            Possible Authorization:


            Definition:
            Using this authorization object, you determine which activities are
            allowed with the payment program for which account types (D for
            customer or K for vendor).

            2.     Object Class: Financial Accounting

                   Object:     F_REGU_BUK
                   Vendor: Automatic Payment: Operation Authorization
                   for Company Code

            Possible Authorization:

            Definition:
            Using this authorization object, you determine which activities are
            allowed for the payment program.
Procedures:

1. Check all authorizations & profiles linked to the critical authorization objects.
2. Review the individual's established user role to ensure access is required to complete
job responsibilities based on job title and department.




3.0    Revenue Audit




                    Test 01 - Overall Cycle Process Flow Narrative

________________________________________________________________________
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                                      SAP Revenue Cycle


Sales Order Processing

Sales orders can be received in many ways, as follows:

Sales orders can only be entered if the customer already exists in the Customer Master
file.

When a sales order is input into SAP, the Order Processing system (Logistics < Sales and
Distribution, Order < Create) inputs the type of transaction to be processed. The options
are as follows:

· Standard order (code OR); is the most frequently used code
· Consignment
· Rush order
· Cash order
· Free of Charge Delivery (FD)
· Credit Memo Request (CR)
· Request for Return (RE)

The transaction type input into the system determines the options available at the next
screen.
· Customer number
· Material number
· Quantity

In general, the remainder of the data (e.g., customer name, price, etc.) will be extracted
from the Customer Master File, Material Master File, and Price Master File. Details
regarding delivery information can be input manually or can be defaulted from the
customer master file.

If the SOP Clerk forgets to input certain data, one of two things will happen:

· If the data is required, the transactions will not continue until the data has been input.
· If the data is not required, the system displays a warning, but will continue to process
even without the data. However, the sales order will appear in the Incompletion Log.
This log can be accessed by Logistics < Sales and Distribution < Sales < Order <
Incomplete Orders < execute button

After a sales order has been input and saved, it can be changed (Order < Change).


Credit:

SAP has the capability to review each order to ascertain if the customer has exceeded
their credit limit. This review is performed in the FI module. However, it is possible for
the company to configure the system so that the credit check is not performed. This must
be reviewed by the auditor.

If a credit check is performed and the customer has exceeded their credit limit, the order
can be blocked at one of three stages:

· Order processing stage (this is the most common and most logical stage)
· Delivery set up stage (i.e., after the order has been sent to the warehouse but before the
order is picked)
· Shipment stage

The auditor should ascertain the stage at which credit blocks are initiated.

Shipment of Goods:

Deliveries are initiated by one of three methods:

· Run a batch program of all deliveries scheduled for a certain day (most common
method)
· Run a report from SAP called Delivery Due List
· Process a selected, individual, delivery
The auditor should ascertain how orders are communicated to the warehouse.

Deliveries are scheduled by working through a Backwards Scheduling Process. Once the
SOP Clerk has input the date on which the customer needs the goods, SAP calculates
(through parameters established in the system), the date on which the goods must be
picked, packed, and shipped in order for the customer to receive the goods on the
requested date.

To start the delivery process, sales order information in transmitted to the warehouse.
Next, picking and packing of the product occur in the warehouse. After these processes
are completed, the goods are shipped.

Once the carrier has shipped the goods, the user accesses the Change Delivery: Overview
- Picking screen. He/she then inputs the quantity of goods picked. This amount must
equal the delivery quantity, which is displayed on the line directly above (the delivery
quantity can be viewed by the warehouse, but normally cannot be changed). If the
amounts do not agree, the system does not proceed.

If the amounts agree, the operator then clicks on a box called Post Goods Issue. This
creates the following journal entry:

Dr: CGS
Cr: Inventory

It also relieves the perpetual inventory records and closes out the sales order.

Once a delivery has been input into Post Goods Issue, it cannot be changed. In R4.X, it
can be changed or reversed.

The following SAP terms are frequently used in the Shipping area:

Picking Date: date goods are picked
Loading Date: date goods are loaded for delivery'
Goods Issue Date: date goods are physically delivered and relieved from Inventory
Delivery Date: date the goods arrive at the customer (this is not the date the goods are
delivered from the warehouse; important to know this for cut-off testing)


Billing:

Billing generally occurs after goods have been shipped. Bills are usually generated in
one of three ways:

· Run a batch program of all completed deliveries by customer
· Run a report from SAP called Billing Due List
· Process a selected, individual invoice
The auditor should ascertain how invoices are prepared.

Invoices are usually generated off of the completed shipments. SAP automatically
extracts the appropriate information from the system and prepares the invoice.

However, invoices can be generated without a shipment as long as a valid sales order is
in the system. This would occur where there is no physical shipment of inventory (e.g.,
services, freight charges, etc.).

In addition, it is also possible to create an invoice without even a sales order. This must
be done via the FI module by generating a debit memo document.

Once the invoice has been created, the following journal entry occurs:

Dr: AR
Cr: Sales

The invoice also updates the customer's subsidiary AR records, the credit master file, and
the sales order file.

In general, the invoice will automatically perform the above entries and updates.
However, there is a system flag which, if not set, will suppress the automatic recording of
the transaction. This is called a "posting block," and it is sometimes activated to give the
company an opportunity to reverse a transaction before it is posted. If this is the case,
then the transactions will not automatically post, but will instead be posted in a batch
mode.

The auditor should ascertain if the posting block is active.


Pricing:

Pricing in SAP is transmitted to the invoice by one of the following methods:

· Automatically transferred over from the price master file
· Automatically transferred over from the price master file and/or the customer master
file (e.g., used if the customer receives the standard price less a special discount)
· Manually input into the invoice/sales order

Finally, it is also possible for the individual who posts paid invoices to alter the price.
Changing the original discounts terms granted to the customer can do this.

The auditor should ascertain the methods by which prices can be changed.
Credit Memos:

There are two types of returns/credits granted to customers:

· Return Request: goods are to be physically returned by the customer
· Credit Memo Request: goods will not be physically returned (e.g., pricing error)

For a Return Request, the user accesses the Sales Order screen and creates a new sales
order under the code RE. He/she then continues with the same process as with a regular
sales order. The system may/may not require him/her to input a reason code explaining
the reason for the return.

When the goods are returned, the user inputs the return into the system in the same
manner as regular delivery except with a different code (LR). The return is linked to the
Return Request and is posted with the following journal entry:

Dr: Inventory
Cr: CGS

To actually grant the customer credit, a bill is created, and the following journal entry is
made:

Dr: Sales
Cr: AR

The customer's account is also updated in the AR subsidiary records.

For a credit memo, there is no physical return of goods. A sales order is created under
the code CR, but a journal entry is not made at this stage. A bill is created, and the entry
as above is made.

For credit memos, SAP sets up a "billing block" in the system. This means that a credit
memo cannot be generated (i.e., a bill cannot be created) until a supervisor has approved
the CR sales order. However, the company may have removed this block in the IMG
module.

The auditor should ascertain if the billing block is active.

Also, it is possible to create a credit memo without referring to an original sales order.
Again, SAP can configure to prevent this and to require every credit memo to be
referenced to an original sales order.

Review all credit memos and those created by using the FB01 transaction in the FI
module.

Posting of Receivables:
Keying of receipts into the system generates the following journal entry:

Dr: Cash
Cr: AR

This also relieves the customer's subsidiary AR account.


Reconciliation of Subsidiary Ledger to GL:

There should be no reconciling items in the main account. However, items will
frequently be recorded in another AR account, so it is important that this account be
reviewed (e.g., receipts which cannot be matched to a customer).
Security Administration for Sales Order Processing, Credit, Shipping, Billing,
Accounts Receivable and General Ledger

1. When access is established for an individual, how do you know that access is
   approved and is appropriate for the employee? Please consider segregation of
   duties issues.
Sales Order Processing

1. Who can create sales order?

2. How do you know that all sales order data (e.g. customer name, quantity, and
   ship to address) was input accurately? Review the IMG settings for Document
   Settings.

3. How do you know that all prices in the system are accurate? (What would
   happen if someone input an incorrect price into the master file or could override
   a price in the master file without authorization)?
4. How do you know that all no-charge orders are authorized?

5. How do you know that every sales order was filled? (What would happen if
   someone never shipped the merchandise to the customer?) Review Shipped not
   billed report.

6. How do you know that all changes to master file data (i.e. customer and pricing
   data) is authorized and accurately input into the system?
Credit

1. How do you know that all new customers have been checked to make sure they
   meet your credit standards?

2. How do you prevent a customer from exceeding their authorized credit limit?
   (The SAP system has a blocking system, which can block all sales orders exceeding
   the customers credit limit. The blocking system should be activated.) Review the
   IMG settings.
3. How do you ensure that all credit overrides are authorized? (All block releases
   should be independently reviewed for appropriate authorizations)
4. How do you prevent shipments to customers’ accounts with balances which are
   past due balances or previously written-off? (The same blocking feature which
   blocks sales orders for customers over their credit should be set up to also block
   customers which have past due balances. The independent review process for
   credit block releases & past due block releases should be on the same report or can
   be viewed within the system at the same location. Customers who are written-off
   should be blocked within the customer master file; therefore, sales orders cannot
   even be created.)
5. How do you ensure that all credit limits are up to date?

6. How do you know that your computer data (credit limits) is protected from
   unauthorized use? (What prevents or detects unauthorized changes or
   approvals to credit limits? How do you know that all changes are accurately
   input?)
Shipping

1. How do you know that all shipments are authorized? (What prevents someone
   from processing a shipment without authorization?) (Within the SAP system once
   a sales order is created it electronically sends information to the warehouse, which
   creates a delivery note based on the original sales order. More then one delivery
   note can be created for a sales order.)

2. How do you know that the quantity of product shipped to the customer equals
   the quantity of product billed to the customer? (What prevents someone from
   accidentally shipping the customer more or less than what was invoiced?) (The
   SAP system is integrated. Invoices are based on the completed delivery note.
   Generally, for most companies, once the shipment is completed the warehouse
   notifies the department, which is responsible for generating invoices, so they can
   then run a batch update to generate invoices for all completed deliveries.)

3. How do you know that every shipment was recorded in the general ledger?
   (What prevents someone from shipping goods and forgetting to record the
   shipment?) (Within the SAP system, once a delivery note is marked as completed
   and an invoice has been generated, the G/L is automatically updated.)
4. How do you know that every shipment was recorded accurately? (What
   prevents someone from recording a shipment at the wrong quantity?) (Within
   the SAP system once the pick & pack quantities are keyed in and marked as
   completed, the system will automatically update the proper quantity. However, the
   company needs to verify that what is listed on the delivery note is actually what gets
   shipped. Usually, companies have the courier delivering the goods sign a copy of
   the completed delivery note or attach a copy of the bill of lading to the completed
   delivery note.)
5. How do you know that shipments are recorded in the correct accounting period?
   (What prevents someone from invoicing goods in one month, but shipping them
   in the next month?) (Within the SAP system invoices are generated based on the
   delivery documents; therefore, you need to verify the completed delivery notes are
   batch processed for invoicing within a timely manner & all deliveries which are
   picked & packed and ready to be shipped are marked as completed. A report can be
   generated or viewed on the system, which shows all deliveries completed but not yet
   invoiced & another report can be seen which shows all open deliveries. Also, in
   addition to verifying the delivery note is completed & the invoice is generated you
   have to make sure that the goods were actually shipped out in a timely manner.
   Usually, companies have the courier delivering the goods sign a copy of the
   completed delivery note or attach a copy of the bill of lading to the completed
   delivery note. )


6. How do you know that a shipment is only recorded in the general ledger one time?
   (This is controlled by the SAP system. Since the system is integrated you can only
    update the G/L once. Also, in case of partial orders, more than one delivery &
    corresponding invoice can be created for a sales order. )
1. How do you know that an invoice has been generated for every shipment? (What
   prevents someone from shipping goods and forgetting to generate an invoice?)
   (This is controlled by the SAP system. Most companies batch process their
   completed deliveries to be invoiced; therefore, each completed delivery is assured to
   have an invoice generated. Also, reports can be viewed which show all completed
   deliveries not yet invoiced & all open deliveries.)

2. How do you know that every invoice has a shipment? (What prevents someone
   from generating an invoice, but never shipping the goods?) (Within the SAP
   system all invoices have to have a corresponding delivery note (showing the goods
   which been picked & packed); however, you have to verify that once the invoice is
   generated that the goods are actually shipped.)

3. How do you know that the quantity on the invoice equals the quantity shipped?
   (What prevents someone from shipping goods and inadvertently generating an
   invoice for a different quantity than shipped?) (This is controlled by the SAP
   system. Invoices are generated based on the delivery documents.)
4. How do you know that every invoice is recorded in the accounts receivable
   subsidiary and general ledger? (What prevents someone from preparing an
   invoice and forgetting to record the invoice?) (This is controlled by the SAP
   system. Once an invoice is generated the subsidiary ledger & G/L is automatically
   updated.)

5. How do you know that every invoice is recorded accurately? (What prevents
   someone from recording an invoice to the wrong customer or for the wrong
   amount?) (This is controlled by the SAP system. Since the system is integrated, as
   long as the sales order information is accurate the invoice, once generated, will
   automatically update to the proper account.)

6. What prevents duplicate recording of sales? The system should be configured to
   look for duplicate customer purchase order numbers on the sale orders


Customer Remittances

1. How do you know that remittances relate to sales?

2. How do you know that all remittances are recorded in the accounts receivable
   subsidiary ledger and updated to the general ledger? (What prevents someone
   from receiving a remittance and forgetting to record the remittance?)
3. How are partial payments handled?
4. How do you ensure collection of remittances, which are returned by the bank for
   “non-sufficient funds”?
5. Do the individuals who record customer remittances have the ability to:
   receive checks returned by the bank for “non-sufficient funds”?
   prepare bank reconciliation’s?
   prepare cash disbursements?
   access petty cash or other cash funds?
Accounts Receivable

1.   How do you prevent acceptance of returns from customers, which were not
     authorized by the company? (Ideally, the group authorizing the return should
     create a return order within the SAP system. The warehouse should then create a
     return delivery document once the goods are returned based on the return order.
     Another department should then review the return order and return delivery
     documents including proof of goods receipts and create a credit memo.)


2.   How do you know that every customer return, adjustment and write-off of an
     accounts receivable balance was accurately and correctly recorded? (What
     prevents someone from recording one of these adjustments to the wrong
     customer or at the wrong price?)
3.   How do you ensure that the amount of a customer return reflects the original
     purchase price? (In SAP you can reference the return back to the original sales
     order.)
4.   How do you ensure that past due balances are detected and collection efforts
     are taken? (The SAP blocking system for past due balances should be activated
     and all releases should be properly reviewed.)

5.   How do you know that all bad debt write-offs are authorized? (What would
     happen if someone wrote off an account without authorization?)

6.   How do you know that customer complaints are addressed and resolved in a
     timely manner?
SAP DETAILED TESTING FOR REVENUE



DETAILED INVOICE TESTING AND SALES CUT-OFF TESTING


Section 1 (Selecting Shipments for Detailed Invoice & Cut-off Testing)

In order to get a listing of all delivery’s for a certain date you can run a table, which will
give you the information needed to make your initial detailed invoice & cut-off
selections.

1. Input Transaction code: SE17

2. Input Table code: LIKP

3. At this screen you will have to establish the settings and parameters so you can view
the information which you will need. Follow the menu path: Settings -> User
Parameters. Then at the “maximum output” box you want to key in several 9’s until you
fill up the entire box and then under “key word” you want to select the “field text” item.
Hit enter or execute.

4. Once you have completed the above step you then want to set up your search range
which will be based on the delivery date. Follow the menu path: Settings -> Selection
Criteria. At this point you want to select the “delivery date” item. Hit enter or execute.

5. You will now need to establish the fields that you want to view when your table is
generated. Follow the menu path: Settings -> List Format -> Select Column. At this
point you will be looking at all the fields which you can view when the table is generated.
All of the fields you see will already be selected and since you don’t need all of the extra
fields the easiest way pick only the ones you want is to go to the bottom and hit “deselect
all”. This will clear all of the fields and let you select the ones you want. Select fields:
Delivery (this will be the delivery number), Delivery Date, Delivery Type, and Sold-to-
party (this will be the customer number.) Hit enter or execute.

6. Then you will need to specify the date range for the delivery’s you want generated.
It’s best to pick a range that will allow you to make both your detailed sales invoice test
selections along with your sales-cut off selections. Hit enter or execute.

From the above data make your selections and then you can proceed to the rest of the
testing.
Note: You only need to look at delivery types for shipments. A delivery type can also
apply to a return delivery. The delivery types may not all be explained within the system.
You may need to ask the client what all of the delivery types mean. In order to view the
delivery type in the system double click on the line item and then you will see all the
information available for that line item. Go to and click on the delivery type box and
then click on the down arrow to view the different delivery types.


Section 2 (Using the Delivery Number obtained from Step 1 for further Testing)

1. Enter the transaction code: VL03; Hit enter or execute

2. Input the delivery number of the item you want to test. Hit enter or execute.

3. Once at the delivery information screen follow the menu path: Environment ->
Document Flow.

You will then be at a screen, which will show you the entire flow of this item from the
original order to the posting in the A/R.

4. Place your cursor at anyone of the items, which you want to view and then hit the
“Display Document” icon, which will take you to that document. (Detail on specifics
provided below at Sections 3 for Cut-off Testing & Section 4 for Detailed Invoice
Testing)


Section 3 (Cut-off Testing)

From the document flow in Section 2 you can obtain the information needed for Sales
Cut-off Testing.

1. “Display Document” the Sales Order to obtain the order information and the Invoice
to obtain billing information.

Note: Displaying the Sales Order & the Invoice will only get you half way through the
test. You should also ask to see the courier’s signature relating to the pick up of the sales
items to verify the goods were actually shipped.


Section 4 (Detailed Invoice Testing)

Note: This section assumes that you have already performed the steps in Section 2.

1. (Sales Order)
“Display Document” the sales order to view the order information. In addition to
viewing the order information, select orders to trace to the original source documents
(customer order form, fax from client, etc…). This is to ensure that the orders were
accurately inputted into the system and were properly approved.

Note: The delivered amount should trace back to the original sales order; however, keep
in mind that the delivery could be for only part of the sales order. A sales order could
have more than one delivery note.

2. (Viewing the Sales Invoice & Detailed Price testing of Materials)

       a. “Display Documenting” the invoice will let you view the Net Invoice Value,
       Gross Price of the item you selected, the cash discount - based on payment terms
       which may be applicable, etc.... (See Step 4 below for more specifics on how to
       test payment terms & Discounts.) FYI: If you double click on any of the line
       items you should be able to drill down to more information.

       b. Click the empty box next to the specific material item you want to test and
       then click on the “Pricing” icon you will be able to view the pricing information
       for that material item. However, you can only view the pricing information for
       one material item at a time.

       c. The pricing information screen will get you the information needed for your
       detailed price test. The pricing screen will have the material number, a
       description of the item and also the rate for just one unit of the item selected.
       Once you get this information you can agree it to approved price sheets to
       complete your testing or depending on how the company has structured the
       pricing you may need to obtain more information.

       d. For additional pricing information follow the menu path: Header -> Detail.
       Once at the Header screen, look under the Price Data section and you will see
       information regarding the Price List Type, Customer Group, Price Group, &
       Pricing Procedure. Depending on the client pricing structure, they may use any of
       the above types or groups to define specific prices or they may not use any of
       these items and rely on manual pricing structures. You may not know what the
       clients pricing structure is based on until you are on site, but it is easier to
       document the other price data information while you are making your pricing
       selections and determine once you get on site whether you need it or not.

       e. Also, as part of your detailed invoice testing you should recalculate the
       material price times the quantity purchased for accuracy. This should be done for
       all of the different material items on the invoice and all of the material totals
       should equal the total on the invoice. The tax amount should also be recalculated
       for accuracy.
3. (Relief of Inventory)

The goods issue information shows when the inventory was updated along with the
related movement type. You can just look at the date in the Document Flow to find out
when or if this occurred (This is sufficient for testing to see if the item was released from
inventory, whoever tests inventory will test to see if the goods issue function is working
correctly). If a goods issue line item is not there then chances are it has not taken place
and if it should have you or the person testing inventory should follow up on why it
hasn’t been done. If for any reason you need to see the specific inventory movement
information on the goods you can “Display Document” the Goods Issue Line and it
should provide you with the specific movement type.

4. (Update of Customer A/R and Payment Terms)

“Display Document” the Accounting information to see the journal entry to post to A/R,
Sales and to any other needed accrual (i.e. taxes). Once at the Accounting Document you
will see the entry to the individual customer’s account, which is sufficient for testing if
the customer’s accounts receivable subsidiary records were updated. Also from the
Accounting Document you can drill down on different line items of the entry to view
additional information. Drilling down on the customer A/R portion will take you to the
payment terms (See below for more information).

At the document flow screen, when you look at the processing status next to the
Accounting Document and you see the words “Not Cleared” it does not mean the account
has not been posted. However, it means that the customer has not yet paid the invoice
and “Cleared” means the customer has already paid. When you display the Accounting
Document you can see the date the entry was posted on, which is also the date shown on
the document flow screen.

Payment Terms: (After you drill down into the customer’s A/R side of the entry)

       Under the Additional details you can see the payment terms, which will dictate, if
       a customer is allowed to take a discount and what the amounts are. If you click in
       this box and then click on the down arrow, an explanation of the payment terms
       will appear.

       The Discount Base will usually always be filled in regardless of whether there is a
       discount set up or not. If there is not then it is not used but if the payment terms
       state that a discount will be given then this is the base amount used to calculate it.

       The Baseline date shows the starting date that is used to calculate the discount or
       it is the due date if there is no discount. (Some companies may have built in extra
       days from the invoice date for the customer to pay to allow for shipment time, this
       would not be evident in the baseline date)
       The Discount Amount shows the actually discount taken or not taken if the
       amount has cleared (been paid). If the invoice has not been paid and the discount
       time has not lapsed it will show a zero amount.

       The Days/percent will show the calculation and the number of days used to
       calculate the discount. This calculation should correspond to the payment terms.

5. (Customer Credit Information)

In order to view the credit information you have to follow several different steps. I have
put the items in the order which I like to view them; however, once you’ve been on the
system for a while you can choice the order you like best. As part of your detailed testing
of your subselections you should combine your credit testing and your past due and over
the credit limit testing. This will give you the same assurance, as picking your samples
separately but it will save you a great deal of time.

Note: During your testing you have to look at different information and make a
judgement as to the credit worthiness of the customers you have selected this will help
you use other data to judge the customer.

a.
Follow the menu path: Accounting -> Financial Accounting -> Accounts receivable ->
Credit Management -> Display. You may also just use transaction code: FD33 to get you
there also.

Then at the screen input the customer name and credit control area information. Also,
select all items from the selection categories by marking each one individually or by
hitting the select all button. Hit enter or execute.

You will then be at a screen where you can view various amounts of customer credit data;
however, you are better off continuing to the credit master sheet which will have the
same information plus other items. This way you can view all of the information you
need all in one place.

From the customer display screen which you are at you want to follow the menu path:
Environment -> Credit Master Sheet. The credit master sheet will have the credit limit, a
recent customer aging analysis, and various other information.

The current aging should tell you a lot about their current outstanding balances.

b.
Follow the menu path: Accounting -> Financial Accounting -> Account -> Display ->
Line item. Then input in the customer name and company code. Select all items under
“Line Item Selections.” The “Settings” should be “Dunning Data” for “Line Layout,”
“Document Type – Posting Key” for “Total Variant,” and “Standard” for the “Sort
Variant.” Then hit enter or execute.
You will be able to see which items have cleared and which ones have not. If you want
to see if there were any past due payments at the time your invoice was generated you
can sort the items by the due date by putting the cursor on the phrase “due date” and
clicking on the sort button. You will also need to add an additional field for the clearing
date so you can tell what dates the items cleared on. You can add an additional field by
placing the cursor where you want the field to be added and then by clicking on the
additional field button and selecting the field that you want. Once you have done this
you are ready to look at the data.

Note1: If the arrears number is negative and the payment has cleared then that is the
number of days ahead of the due date which the customer made the payment. If the
payment has not cleared and the arrears number is negative then that is the number of
days remaining until the due date. If the arrears number is positive and the payment has
cleared then that is the number of days the customer was past due on their payment from
their due date. If the payment has not cleared and the arrears number is negative then that
is number of days that they are already past due form their due date.

Note2: The above steps should be done in addition to looking at the block release
information related to the customer because you want to double check if their should
have been a block for the customer based on either their credit limit or for being past due
on a payment. Looking at the above information should give you a basic feel for the
customers credit history with the company, which is very important. If the company has
not activated the blocking feature then you also want to view the information above to
see if there should have been some sort of block in place by other means. Also, you need
to get an understanding from the client what those other means are and if they are
adequate.


Note: for your subselection you should trace them to see if the appropriate approvals
were obtained to establish the customer’s credit limit and also if the limits were
established according to company policy.




Additional items to be looked at:

Credit Testing – Including looking at block releases

For Sale Return

Tans Code se17
Table VBAK

Setting - List Format - Select Columns
Fill in ERDAT - Date String
Fill in AUART - Order Type

To View Changes

SD - Master Data - Business Partner - Sold to party - Display Changes - Multiple
Customers or display customer (multiple is for more than one) This is for changes or
updates to the Customer Master

FD04 or Accounting -> Financial Accounting -> Accounts Receivable -> Master
Records -> Display Changes

Miscellaneous

At Account Analysis: GOTO-> Open Items -> All Items -> Cash Discount Terms
                              Test 03 - A/R Aging Test

________________________________________________________________________
_____


Purpose: To test the validity and accuracy of the accounts receivable aged trial
         balance.

Scope:    Selected __ invoices from the most recent aged trial balance.

SAP Menu Path:
        Generate SAP A/R Aging Report.
        Accounting --> Financial Accounting --> Accounts Receivable -->
        Periodic Processing --> Info System --> Report Selection
        Double Click INFORMATION SYSTEM / ACCOUNT INFORMATION /
        DAYS OVER DUE ANALYSIS
        Enter the following: _______
        Customer Number: _______
        Company Code: ______
        Fiscal Year: ____ / ____
        Open Items at Key Date: _______
        Output Control List - Due Date Sorted List: _______
        Execute

Attributes:
          A - Recalculated age of the receivable based on date shipped and
          determined that the invoice amount is recorded in the proper aging
          category.

          Make sure to select invoices in the <90 Days Outstanding category to
          ensure that invoices were aged in the proper periods. In order to reduce
          the amount of write-offs, and thus, the bad debt reserve, it is possible
          that companies may place invoices in improper buckets. Also, the
          auditor should verify the invoice date against that maintained in the
          system within the A/R account.
    Customer   Invoice   Invoice Date   Date A/R   Invoice   A
    Name /     Number                   Was        Amount
    Number                              Recorded
1
2
3
4
5
                         Test 04 - Detailed Sales Invoice Test

________________________________________________________________________
_____


Purpose:      To test controls over the accurate processing and recorded of sales orders
and invoices.

Scope:        Selected __ shipments from shipping records.

SAP Menu Path:
           1.         Transaction Code:      /NSE17 --> Enter
                      Table Code:            LIKP --> Enter
                      Settings --> Selection Criteria (select DELIVERY DATE)
                      Settings --> User Parameters (key in many 9s in the "maximum
                      output" box and select FIELD TEXT)
                      Settings --> List Format --> Select Column (select VBELN:
                      DELIVERY, LFART: DELIVERY TYPE, AUTLE: COMPLETE
                      DELIVERY, WADAT: GOODS ISSUE DATE, KUNAG: SOLD-
                      TO-PARTY, FKDAT: BILLING DATE) --> Execute

              2.      Transaction Code:   /NVL03
                      Input DELIVERY NUMBER (from above generated report) -->
                      Enter
                      Environment --> Document Flow (FI Module)

                 DOCUMENT FLOW can lead to the three different modules in
                 SAP by highlighting the following items in the Document Flow:
                 a. ORDER column --> Display Documents (SD Module): Sales
                 Order Information
                 b. GD GOOD ISSUE --> Display Documents (MM Module)
                 Goods Movement Information --> Accounting Docs --> Double
                 Click the Accounting Documents Number: journal entries made by
                 SAP for the inventory goods movement
c. ACCOUNTING DOCUMENT -->Display Document (FI Module): Accounting
                 Information: journal entries made by SAP for the sales, discount,
                 and taxes related to the shipment
LEGEND (may be deleted if use pop-up)

A - Traced and agreed shipping documentation (bills of lading) to sales orders and
invoice.
B - Noted ship date and ensured that invoice was recorded in the proper period.
C - Traced and agreed invoices price to approved price lists. Verified that all special
pricing has been approved in accordance to company's policies.
D - Traced to posting in customer's account to A/R subledger.
E - Traced to the Inventory Perpetual Records to ensure proper relief of inventory.
(Coordinate with Inventory Cycle Testing.)
X - Attribute met without exception.
                        Test 05 - No Charge Sales Order Test

________________________________________________________________________
_____



Purpose:      To test controls over the authorization and shipment of no-charge orders.

Scope:        Selected __ no charge sales from SAP native report.

Summary of Test:

           Customer Number      Delivery Number      Invoice #            Invoice Date    A
 1
 2
 3
 4
 5


LEGEND (may delete if use pop-up)

A - Traced to shipping documentation (i.e. bill of lading) agreeing all pertinent
information.
B - Traced to supporting documentation noting appropriateness of no-charge order and
appropriate approval in accordance with company policy.

X - Attribute met without exception.
                  Test 06 - Past Due Balances and Credit Hold Test

________________________________________________________________________
_____


Purpose:      To determine if shipment of goods is being withheld from customers with
              past due balances and on credit hold. To determine if collection efforts are
              being conducted in accordance with company policy.

Scope:        Selected 5 customers with A/R balances past due and on credit hold.

SAP Menu Path:
           1.      Generate SAP A/R Aging Report.
           Accounting --> Financial Accounting --> Accounts Receivable -->
           Periodic Processing --> Info System --> Report Selection
           Double Click INFORMATION SYSTEM / ACCOUNT INFORMATION
           / DAYS OVER DUE ANALYSIS
           Enter the following:
           Customer Number: XXXXXX to XXXXXX
           Company Code:         XXXX
           Fiscal Year:          YYYY
           Open Items at Key Date:      MM/DD/YYYY (given)
           Output Control List - Due Date Sorted List: (Blank) (30) (60) (90) (120)
           Execute

              2.      Selected ___ Customer with over 90 days past due balances (See
              the Summary of Test for details)
              Accounting --> Financial Accounting --> Accounts Receivable -->
              Master Records --> Display
              Select all listed items (Enter and use the NEXT SCREEN key to review
              the customer's general information, including block payment status)
              Continue by using the following menu path:
              Environment --> Credit Management
              Key in: CUSTOMER NUMBER (From the above list) / COMPANY
              CODE (XXXX)
              Select all listed items, except CENTRAL DATA, (Enter and use the
              NEXT SCREEN key to review the customer's credit limits, current
              outstanding A/R balance, and payment history)

Credit Hold Procedures:
             There are two types of credit hold in the Company's SAP system by
             blocking the customer's account. 1. Automatic block: SAP system blocks
             the customer's account when its outstanding A/R balance is over its credit
              limits. The blocked can be released by ___________, ___position___,
              upon the Company's financial manager's approval.

              2. Manual block: ____________, ___position___, blocks the past due
              customer's account by the customer groups. They are as follows:


 Customer Group                        Credit Limit (Standard)       Credit Hold Conditions




Summary of Test:


        Customer                                          Customer       A         B      C
                                                          Number
 1
 2
 3
 4
 5


LEGEND (may delete if use pop-up)
A - Obtain the Credit Department files and review the correspondence to ensure that the
account is followed up on a current basis.
B - Verified that shipments are not made to customers with long outstanding past due
balances or on credit hold.
C - Reviewed the credit investigation procedures performed on these customers to ensure
that company policy was followed.

X - Attribute met without exception.
                Test 07 - Customer With No Credit Limits Test

________________________________________________________________________
_____


Purpose:    To determine if shipment of goods is being withheld from customers with
            no credit limits. To determine if collection efforts are being conducted in
            accordance with company policy.

Scope:      Searched 100% customers with no credit limits.

Source:

SAP Menu Path:
           1.      Accounting --> Financial Accounting -->
           Accounts Receivable --> Master Records Display
           Enter the followings:
           a.      Customer number from the attached file
           b.      Company code (XXXX)
           c.      Select ADDRESS & PAYMENT TRANSACTION (General
           Data), PAYMENT DATA (Company Data)

            2.       Environment --> Credit Management
            Enter the followings:
            a.       Customer number (usually already exist in the
            field after the step 1)
            b.       Company code (usually already exist in the field
            after the step 1)
            c.       Select OVERVIEW (Overview), ADDRESS (General Data),
            STATUS & PAYMENT HISTORY (Credit Control Area Data)

Findings:   Total ____ sold-to customers has zero credit limits, including ___
            customer(s) have outstanding A/R balances, and ___ customer(s) has
            credit A/R balance.

            The outstanding A/R balances equal to _______, (approximately USD
            _____).    The outstanding credit A/R balance equals to _____,
            (approximately USD ___)
                             Test 08 - Sales Cut-Off Test

________________________________________________________________________
_____


Purpose:      To ensure that sales activity was recorded within the proper
              accounting period.

Scope:        Selected __ shipping documents __ days before and __days after the
              quarter close for both the current quarter under review and year-end
              activity.

              Stratify your sample size to include shipping activity based on:

              a. Materiality of sales transactions
              b. Types of shipments, i.e., end users, intercompany, sales
              representative, or distributions

Testing Attribute:

              A. Compared shipping date to invoice date and ensured that the
              sale was recorded in the proper period.
              B. Agreed shipping documents to signed bills of lading from the
              carrier, noting the date of shipment.

Summary of Test:

         Customer     Shipping        Shipping       Invoice        Invoice      Invoice   A   B
         Name     /   Doc. #          Date           Date           Number       Amount
         Number
 1
 2
 3
 4
 5
 6
 7
 8
 9
 10
                           Test 09 - A/R Write Off Test

________________________________________________________________________
_____


Purpose:     To test the controls over authorization and collection efforts of accounts
             receivable write-offs.
Scope:       Select 100% Customer write-offs from the SAP Allowance for Doubtful
             Account in YYYY (based on audit scope). The items selected were actual
             write-offs and not just the establishment of an A/R reserve. In other
             words, the items selected were part of the following entry:

             Dr: Allowance for Doubtful Accounts,
             Cr: Accounts Receivable

SAP Menu Path:
           1.     Allowance for Doubtful Account Number = _______
           2.     Accounting --> Financial Accounting --> General Ledger -->
           Account --> Display Balances
                  Enter the following information:
                  Account Number = ______
                  Company Code = ______
                  Fiscal Year = ___ /____
                  Enter
           3.     Double click on each line item show on the screen to obtain the
           document number
                  (See below SUMMARY OF TEST for details)
           4.     Accounting --> Financial Accounting --> Accounts Receivable -->
           Document --> Display
                  Enter Document Number / Company Code / Fiscal Year --> Enter -
                  -> Double Click on the Document Number to obtain detailed
                  information ==> look in the TEXT area for Customer Number, if
                  not in the TEXT area, the customer name and/or account number
                  will be listed.
           5.     Accounting --> Financial Accounting --> Accounts Receivable -->
           Master Records -> Display
                  Enter Customer Number / Company Code / Selected all of the
                  General Data & Company Data --> Enter --> Click on the NEXT
                  SCREEN key 4 times to DISPLAY CUSTOMER: PAYMENT
                  TRANSACTION screen, you will see letter "A" in the Automatic
                  Payment Transactions / Payment Block field which means that the
                  customer was block for future order/shipping process.

Summary of Test:
        CUSTOMER /                      SAP system generated             Date of        A   B   C
        CUSTOMER NUMBER                 Document Number                  write-off
  1
 2


  3


LEGEND (may be deleted if use pop-up)

A - Review collection efforts made prior to write-off and subsequent to write-off.
B - Traced to written authorization for the write-off.
C - Traced and agreed to the AR subsidiary and general ledger.
D - Ensured that credit limit for customer has been reduced to zero to prevent future
               shipments.
X - Attribute met without exception.
                    Test 10 - Reserve for Doubtful Account Test

________________________________________________________________________
_____


Purpose: To test the calculation of the Company reserve for doubtful accounts, and to
         determine the reasonableness of the reserve amount.

Scope:    Review the most recent month end doubtful accounts reserve (i.e., the cut-off
          date for the audit). Also, concentrate your testing on the year-end doubtful
          accounts reserve value.

          Note: Ensure that management is performing a quarterly doubtful
                accounts analysis to determine if a reserve is necessary. If this is
                not being performed, then a comment is warranted.

                 Materiality should always be considered, evaluated and discussed
                 with the Team Coordinator, Job Manager and company personnel
                 in determining whether to establish a doubtful accounts reserve.
SAP Menu Path:
        1. Allowance for Doubtful Account Number = ______
        2. Accounting --> Financial Accounting --> General Ledger --> Account -->
        Display Balances
           Enter the following information:
           Account Number = ________
           Company Code = ______
           Fiscal Year = _____ / _____
           Enter
        3. Double click on each line item show on the screen to obtain the document
        number
           (See below SUMMARY OF TEST for details)

          The purpose of the reserve account is to adjust the receivable asset position to
          a net realizable amount (i.e., the amount judged to be collectible). In
          establishing and adjusting the level of the reserve, we are also attempting to
          record the bad debt expense against the income of the period in which it is
          recognized.

          The reserve for uncollectible accounts should be supportable and not an
          arbitrary estimate. The reserve account should not include over, short and
          damaged charges, promotional allowances, or other customer adjustments.
          These items should be expensed directly.
          The method utilized by each company shall be decided based upon company
          requirements.


                    First Quarter Second Quarter            Third Quarter Fourth
Quarter
                                 (YTD)
Total A/R Write-Offs (YYYY)
Less: Total Write-Off
      Recoveries
Net Bad Debt Losses
Gross Receivables
Net Bad Debt Losses
As a % of Gross Receivables
                     Test 11 - Sales Return Reserve Account Test

________________________________________________________________________
_____


Purpose: To test the calculation of the Company reserve for right of return and to
         determine the reasonableness of the reserve amount.

Scope:     Review the most recent month end sales return reserve (i.e., the cut-off date
           for the audit). Also, concentrate your testing on the year-end sales return
           reserve value.

           Note: Ensure that management is performing a quarterly sales return
                 analysis to determine if a reserve is necessary. If this is not being
                 performed, then a comment is warranted.

                  Most companies normally do not carry a sales return reserve on
                  their books unless the return activity represents a material
                  amount. Materiality should always be considered, evaluated and
                  discussed with the Team Coordinator, Job Manager and company
                  personnel.

SAP Menu Path:
        1. Sales Return Account Number = ________
        2. Accounting --> Financial Accounting --> General Ledger --> Account -->
        Display Balances
           Enter the following information:
           Account Number = ________
           Company Code = _____
           Fiscal Year = _____ / _____
           Enter

Guidance: In calculating a reasonable sale return reserve, it is crucial for management to
          perform a historical analysis of returns in order to understand the relationship
          between sales and the sales returns which have occurred throughout the
          existence of the Company. The question arises as to how many years the
          Company should be using to obtain a reasonable representation of past
          experiences. Ideally, an analysis consisting of figures from the past 10 years
          would provide ample data on which to make a reasonable estimate based on
          past experience. If the Company has not been in existence for that long, the
          Company should use however many years of data are available. For those
          companies in their first year of operations, management should probably
          benchmark itself against other J&J operating companies who are in the same
          business sector and who serve similar customers as a guide until they become
          established.   In all cases, estimates should be subject to management’s
          judgment.


                     First Quarter Second Quarter                Third Quarter Fourth
Quarter
                                 (YTD)
Sales (YYYY, exclude intercompany)
Returns *
Reserve Balance
Returns as a % of Sales
Returns as a % of Reserve

* Make sure that the return value only encompasses actual product returns and not price
adjustments and/or product exchanges.
                     Test 12 - Sales Return and Adjustment Test

________________________________________________________________________
_____


Purpose: To ensure that sales returns and adjustments are authorized, accurately
         recorded and appropriately documented.

Scope:    Selected ___ credit memos for testing.

          Period tested should be at least 6 months. Your selection should be
          spread out over the time period under review and not concentrated in
          only one month. Stratify your sample selection to include credit
          memos for:

          1.   Product Returns
          2.   Price adjustments
          3.   Product defects
          4.   product exchanges

SAP Menu Path:

          In SD Module:
          1. Logistics --> Sales / Distribution --> Shipping --> Delivery -->
          Display
              Enter the DELIVERY NUMBER
          2. Environment --> Document Flow --> Item with Deliv. Stat -->
          Document Flow
          3 Obtain Credit Memo Number and Accounting Document Number
          4. Review Release for Credit Memo
              Logistics --> Sales / Distribution --> Sales --> Orders --> Display
              Enter the order return number (usually number starting with 6)
              Click on the message CONSIDER THE SUBSEQUENT
          DOCUMENT
              Environment --> Changes
              Execute
              Double click on each line item to review the changes in return
          related to the goods return

          In FI Module:
          1. Accounting --> Financial Accounting --> Accounts Receivable -
          -> Document Display
              Enter the following:
              Accounting Document Number from above
              Company Code
              Fiscal Year (_____), press Enter
          2. Environment --> Document Flow
          3a. The document flow provides Order Number, Return Number,
          Return Deliver Number, GD Return Block Number, Credit Memo
          Number, and Accounting Document Number.
          3b. High light each item, click on the DISPLAY DOCUMENT to
          obtain further information at each stage of the process.
          4. When the normal goods returned back to warehouse, the journal
          entries for the sales were reversed.
          In MM Module:
          1. When normal goods returned back to warehouse, the inventory
          movement shows that the inventory has added back to the inventory.
          2. When damaged goods returned back to warehouse, the inventory
          movement shows blocked for future sales. Usually the goods are
          destroyed immediately.

Testing Attributes:

          A. Reviewed credit memo and supporting documents (e.g. return
          approval form) for appropriate management approval.
          B. Traced to A/R subsidiary ledger, noting that credit memo was
          recorded in a timely manner.
          C. Review credits memos for appropriateness of the reason for issuing
          the credit memo.
          D. Agreed to prices and customer on the price to the original invoice.
          E. Traced to approved receiving report or other evidence of receipt for
          product returns and exchange.
          F. Reviewed destruction authorization forms to ensure that the
          product was appropriately disposed of for product defects, damages or
          expired goods.

          X. Attribute met without exception.

Summary of Test:
    Custome   Delivery   Goods      Credit   A   B   C   D   E   F
    r         Number     Received   Number
    Number               Date       Date /
                                    Credit
                                    Number
1
2
3
4
5
                         Test 13 - Credit Approval Test

________________________________________________________________________
_____


Purpose:    To review controls which ensure customer orders are approved for credit
            prior to shipment and credit approval is granted in accordance with
            company policy.

Scope:      Selected __ recent customer invoices from SAP system generated report.
            Selected __ new customers from SAP system.

Findings:   The following table shows the standard credit limits set up per customer
group:


 Customer Group                                     Credit Limit (Standard)
                 Test 14 - Customer Master File Edit Report Test

________________________________________________________________________
_____


Purpose:      To ensure that all changes to the customer master file are properly
              authorized and reviewed.

Scope:        Review the Company run edit reports for the changes made to the
              customer master file from ______ up to current.

Source:


SAP Menu Pass:   Information System --> Accounting --> Financial
            Accounting --> Accounts Receivable --> Select Report -->
            Adequacy / Documents --> Master Data --> Changes
            (Transaction Code: SART; Program: RFDABLOO)

              Key in:  Customer Number (XXXXXX - XXXXXX)
                       Change Date (current date)
                       Check the three (3) items in the FURTHER
              SELECTIONS

              Obtained the Company generated daily reports for both new
              vendors and changes made to the Vendor Master File from
              ________ up to current.

              The following reports are used by the Company:

              RFDABLOO

Findings:     Process for update customer master file:

              1. Who has access to create new customers to the customer
              master file in SAP system?


              2. Who has access to create new customers to OTC system?
                     Test 15 - Price Master File Report Test

________________________________________________________________________
_____


Purpose:     To ensure that all changes to the price master file are properly
             authorized and reviewed.

Scope:       Review the Company price master edit reports for the changes
             made to the price master file from January up to current.

Source:


Menu Pass:   Information System --> Services --> Reports

             Program Name:

             Start Date:           according to the audit scope
             End Date:             according to the audit scope

             Reviewed the Company generated first four-month reports for all
             price changes to the price master file.

Findings:    Process for update customer master file:


             1. Who approves price changes to the price master?




             2. Who has access update the price in the price master file?
                        Test 16 - Detailed Cash Remittance Test

________________________________________________________________________
_____


Purpose:       To test controls over the accurate processing and proper recording of cash
remittances.

Scope:         1. Select __ wire transfers from within two days before and after cut-off
               from the bank statements.

               2. Select __ days receipts from the "check book". Included receipts
               immediately before and after the end of the quarter-end under review.
               Selected a representative number of individual receipts from the above.
               Checked Bank statement sequences.

Attribute:
               A - Agreed the total days' receipts to control totals prepared at point of
receipt.
               B - Agreed to deposit slips and timely recording (proper period) in cash
               account or bank statements.
               C - Agreed to check copies and/or remittance advice.
               D - Traced and agreed to posting in AR subsidiary records.

               X - Attribute met without exception.

Findings:      1. The Company currently uses __ banks for receiving cash remittances.
               The reason is for the convenient of the customers.

               The __ banks are as follows:

                         Bank Name                                 Average Cash Collection vs. Total Cash
                                                                   Receipts per Month
  1
  2
  3
  4
  5




Customer Cash Remittances: Wire Transfers
          Date of               Amount               Customer /               Amount     C
          Receipt in Bank       Received by Wire     Customer                 Remitted
                                                     Number
 1
 2
 3
 4
 5
 6



Customer Cash Remittance: Checks



        Date of             Amount            Date                A       B
        Receipt                               Recorded
 1
 2
 3



        Customer /                        Amount             C        D
        Customer Number                   Remitted
 1
 2
 3


Conclusion: Based on the testing performed, the controls appear to be ________.
                  Test 17 - Access Test for Customer Master File

________________________________________________________________________
_____

 Purpose:   To ensure that individuals who have access to customer master file are
            current employees and have the required access to perform their
            current job responsibilities.

 Source:    SAP system

 Scope:     Obtained queries from the SAP system of all employees with access
            to critical transactions. From the queries, CIA selected 100%
            individuals in the critical objective identified by CIA from Goods
            receipt for testing.

 SAP Menu Path:

            SUIM

            Object Class: Financial Accounting

                    Object:     F_KNA1_APP
                    Customer: Application Authorization

            Definition:
            Using this authorization object, you determine which activities are allowed
            for customer master records. You can define this authorization separately
            for the Financial Accounting (FI) and Sales and Distribution
            (SD) applications. If an employee is allowed to edit the master data for
            both applications, then he/she needs the authorization for both
            applications.

            Critical Fields:
            Activity is all
            Application is V

            Note: V indicates that only the SD functions can be updated for the
            customer master file. In the V function, a person can update
            customer name, shipping address, billing address, and customer
            contact name.

            If update access is granted to FI, credit limits, bank information, VAT
            number, payment terms, etc.
               Each authorization and profile within the critical Object
               must be tested. You may find some of the authorizations
               and profiles are empty, which means that authorizations
               and profiles are not used by the Company.

Procedures:
1. Check all authorizations & profiles linked to the critical authorization
   objects.
2. Review the individual's established user role to ensure access is required
   to complete job responsibilities based on job title and department.
                    Test 18 - Access Test for Price Master File

________________________________________________________________________
_____

 Purpose:   To ensure that individuals who have access to price master file are
            current employees and have the required access to perform their
            current job responsibilities.

 Source:    SAP system

 Scope:     Obtained queries from the SAP system of all employees with access
            to critical transactions.

 SAP Menu Path:

            SUIM

            1.      Class: Sales and Distribution

                    Object :     V_KONH_VKS
                    Condition: Authorization for Condition
            Types

            Definition:
            Enables you to restrict user access to condition types. In addition, you
            must maintain the authorization object V_KONH_VKO (controls
            conditions within specific sales areas) and V_KONG_VWE (controls the
            generation of condition tables).

            Critical Field:
            Activity:
                    01            Create
                    02            Change

            2.      Class:        Sales and Distribution

                  Object :     V_KONH_VKO
                  Condition: Authorization for Sales
            Organizations

            Definition:
            Determines which activities are allowed in specified sales areas for the
            maintenance of condition types in Sales & Distribution (SD). You must
               also maintain the authorization object that allows users to work with
               different condition types.

               Critical Field:
               Activity:
                       01             Create
                       02             Change



               Each authorization and profile within the critical Object
               must be tested. You may find some of the authorizations
               and profiles are empty, which means that authorizations
               and profiles are not used by the Company.

Procedures:
1. Check all authorizations & profiles linked to the critical authorization
objects.
2. Review the individual's established user role to ensure access is required to
complete job responsibilities based on job title and department.
                  Test 19 - Access Test for Sales Order Process

________________________________________________________________________
_____


 Purpose:   To ensure that individuals who have access to sales order process are
            current employees and have the required access to perform their current
            job responsibilities.

 Source:    SAP system

 Scope:     Obtained queries from the SAP system of all employees with access to
            critical transactions.

 SAP Menu Path:

            SUIM

            1)    SD Object: V_VBAK_VKO Sales Document:
            Authorization for Sales Organization (Sales Area)

            Definition:
            Determines which activities are allowed in specified sales areas for
            the maintenance of sales document types in SD. You must also
            maintain the authorization object that allows users to work with
            different sales document types.

            Defined Fields:
            You can specify values for the following fields:
            -     Sales Organization
            -     Distribution Channel
            -     Division
            -     Activities

            Values Activity
                   01     Add or Create
                   24     Archive & Delete
                   25     Retrieve from Archive
                   *      All Activities

            2) SD Object: V_VBAK_AAT Sales Document:
            Authorization for Sales Document Types

            Definition:
               Defined Fields:
               Sales Document Type
               -      Activities
               The possible values you can enter for activities are predefined.
               They consist of:

                       Values Activity
                       01     Add or Create
                       02     Change
                       03     Display
                       06     Delete
                       24     Archive & Delete
                       25     Retrieve from Archive
                       *      All Activities



Procedures:
1. Check all authorizations & profiles linked to the critical authorization objects.
2. Review the individual's established user role to ensure access is required to
   complete job responsibilities based on job title and department.
                      Test 20 - Access Test for Test Billing

________________________________________________________________________
_____


 Purpose:   To ensure that individuals who have access to billing process are current
            employees and have the required access to perform their current job
            responsibilities.

 Source:    SAP system

 Scope:     Obtained queries from the SAP system of all employees with access to
            critical transactions.

 SAP Menu Path:

            SUIM

            1) SD Object: V_VBRK_VKO Billing: Authorization for
            Sales Organizations

            Definition:
            Determines which activities are allowed for the maintenance of Billing
            Types in SD. You must also maintain the authorization object that allows
            users to maintain billing types in specified sales organization.

            Defined Fields:
            You can specify values for the following fields:
            - Billing Type
            - Activities

            The possible values you can enter for activities are predefined. They
            consist of:

                   Values Activity
                   01     Add or Create
                   02     Change
                   03     Display
                   04     Print, Maintain Output
                   19     Process Collective Invoices
                   24     Archive & Delete
                   25     Retrieve from Archive
                   *      All Activities
               2) SD Object: V_VBAK_FKA Billing: Authorization for Billing
               Types

               Definition:
               Determines which activities are allowed in specified sales organizations
               for the maintenance of Billing Types in SD. You must also maintain the
               authorization object that allows users to work with different Billing Types.

               Defined Fields:
               You can specify values for the following fields:
               - Sales Organization
               - Activities

               The possible values you can enter for activities are predefined. They
               consist of:

                       Values Activity
                       01     Add or Create
                       02     Change
                       03     Display
                       04     Print, Maintain Output
                       19     Process Collective Invoices
                       24     Archive & Delete
                       25     Retrieve from Archive
                       *      All Activities

Procedures:
        1. Check all authorizations & profiles linked to the critical authorization
objects.
        2. Review the individual's established user role to ensure access is required to
        complete job responsibilities based on job title and department.
                        Test 21 - Access Test for Incoming Cash

________________________________________________________________________
_____

 Purpose:      To ensure that individuals who have access to incoming cash are current
               employees and have the required access to perform their current job
               responsibilities.

 Source:       SAP system

 Scope:        Obtained queries from the SAP system of all employees with access to
               critical transactions.

 SAP Menu Path:

               SUIM

               FI OBJECT: F_BKPF_BUK Accounting Document: Authorization
               for Company Code

               Definition:
               Using this authorization object, you determine which company code
               documents can be processed. An employee can only call up the functions
               for posting if he/she has this authorization in at least the company code.

               Defined Fields:
               The object consists of the "Company Code." You take the possible input
               values for the "Activity" field from table TACT2.

               Activity
                      01              Create
                      02              Change


Procedures:
1. Check all authorizations & profiles linked to the critical authorization objects.
2. Review the individual's established user role to ensure access is required to
   complete job responsibilities based on job title and department.
                    Test 22 - Access Test for Segregation of Duties

________________________________________________________________________
_____


Purpose:       To ensure that the Company has properly segregated each individuals
access in each critical transactions.

Source:        SAP system

Scope:         All access test in each critical function

Summary of Test:
            Process Sales Orders:

               User Name
               xxxxxxx (Position)
               xxxxxxx (Position)

               Update Customer Master File in SD:          Review Customer
               Master File:

               User Name
               xxxxxxx (Position)
               xxxxxxx (Position)

               Change Prices:                              Review Price Edit
         Report:

               User Name
               xxxxxxx (Position)
               xxxxxxx (Position)

               Invoice Customers:

               User Name
               xxxxxxx (Position)
               xxxxxxx (Position)

               Process returns:

               User Name
               xxxxxxx (Position)
               xxxxxxx (Position)
Credit Master File:

User Name
xxxxxxx (Position)
xxxxxxx (Position)
                   Test 23 - Access Test for Goods Movement

________________________________________________________________________
_____


 Purpose:   To ensure that individuals who have access to shippings (including
            delivery) and receiving are current employees and have the required
            access to perform their current job responsibilities.

 Source:    SAP system

 Scope:     Obtained queries from the SAP system of all employees with access to
            critical transactions.

 SAP Menu Path:

            SUIM

            1) MM Object: M_MSEG_WWA Goods Movement: Plant

            Definition:
            With this authorization object, it is possible to restrict the maintenance of
            goods movements via the plant.

            Defined Fields:
            You can specify values for the following fields:
            - Plant
            - Activities

            The possible values you can enter for activities are predefined. They
            consist of:

                   Values Activity
                   01     Add or Create
                   02     Change
                   03     Display
                   04     Print, Maintain Output
                   *      All Activities

            2) MM Object: M_MSEG_BWA Goods Movement: Movement
            Type

            Definition:
              With this authorization object it is possible to restrict the maintenance of
              goods movements via the movement type.

              Defined Fields:
              You can specify values for the following fields:
              - Sales Organization
              - Activities
              The possible values you can enter for activities are predefined. They
              consist of:

                     Values Activity
                     01     Add or Create
                     02     Change
                     03     Display
                     04     Print, Maintain Output
                     *      All Activities

              3) SD Object: V_LIKP_VST Delivery: Authorization for Shipping
              Point

              Note: Shipping Address and Customer Info. Resides within
              the Customer Master Data.

              Definition:
              Determines which activities are allowed for the maintenance of the
              shipping points that are used for delivery processing in SD.

              Defined Fields:
              You can specify values for the following fields:
              - Shipping Point
              - Activities

              The possible values you can enter for activities are predefined. They
              consist of:

                     Values Activity
                     01     Add or Create
                     02     Change
                     03     Display
                     06     Delete
                     18     Process Deliveries Collectively
                     24     Archive & Delete
                     25     Retrieve from Archive
                     *      All Activities

Procedures:
1. Check all authorizations & profiles linked to the critical authorization objects.
2. Review the individual's established user role to ensure access is required to
   complete job responsibilities based on job title and department.
                   Test 24 - Access Test For Credit Master File

________________________________________________________________________
_____

 Purpose:   To ensure that individuals who have access to credit master file are current
            employees and have the required access to perform their current job
            responsibilities.

 Source:    SAP system

 Scope:     Obtained queries from the SAP system of all employees with access to
            critical transactions.

 SAP Menu Path:

            SUIM

            Note: Within SAP if you perform a transaction which directly effects
            another area you will need change access for that area. For example,
            the person who has the authority to block and unblock sales orders
            based on the customers exceeding their credit limits and/or for being
            past due will also need change access for sales orders. However, keep
            in mind that they only need change & display access and do not need
            create, delete, *, etc.

            1) FI Object: F_KNKA_MAN Credit Management: General
            Authorization to Maintain

            Definition:
            This object controls the authorizations for maintaining the control area-
            related data for a customer limit.

            Defined Fields:
            Activities
                    01             Create
                    02             Change

            2) FI Object: F_KNKA_KKB Credit Management: Authorization
            for Credit Control - primary

            Definition:
            This object controls the authorizations for maintaining the control area-
            related data for a customer limit. At this level you define whether a user is
            allowed to edit control area-related data for a customer credit limit.
Defined Fields:
Activities
       01              Create
       02              Change


3) FI Object: K_KNKA_AEN Credit Management: Change
Authorization for Certain Fields

Definition:
Using this authorization object, you can define a change authorization
fields you selected in the credit management master record. Only the
employee who was assigned this authorization can change these fields.

Note: This authorization is optional. You therefore do not have to
assign this authorization if no fields should be especially protected
against changes. The contents of a protected field are still displayed
to everyone. This authorization is not checked when creating. This
authorization applies to all credit control areas.

Defined Fields:
Activities
        01             Create
        02             Change

4) SD Object: V_KNKK_FRE Credit Limit: Processing of SD
Documents

Definition:
Enables you to restrict user access in the area of credit management.
Credit representatives and managers carry out, for example, the following
tasks:
- Releasing credit sensitive documents
- Rejecting credit
- Forwarding credit requests to other credit representatives or managers
- Initiating another check

In order to carryout these tasks in sales, shipping, & billing documents, the
credit representative or manager must have the appropriate authorization.
The field are listed below. In addition, you must also maintain
V_VBUK_FRE (controls the document value groups).

Defined Fields:
You can specify values for the following fields:
               - Credit Representative Group - Specifies the group to which the credit
               representative or manager is assigned
               - Credit Limit Used In % - Specifies the maximum amount of credit limit
               used by a particular customer (relationship between credit used & credit
               limit in percentages). If the customer exceeds this limit, the credit
               representative cannot process the document.
               - Credit Control Area - Specifies to which area the user is assigned.
               - Activities -

               The possible values you can enter for activities are predefined. They
               consist of:

               Activity
                      03       Display
                      23       Maintain Environment
                      *        All Activities


               5) SD Object: V_VBUK_FRE Credit Document Value Class:
               Processing of SD Documents

               Definition:
               Enables you to restrict the value of Credit Holds (Blocked sales orders and
               deliveries) that a credit representative or manager may process. In
               addition, you must also maintain V_KNKK_FRE (controls authorizations
               by credit control area, credit representative group, risk category, and % of
               credit limit used).

               Defined Fields:
               Document Values - Specifies ranges of document value, document value
               class, he or she may process sales or delivery documents up to a specified
               range.

               Activities
                       03      Display
                       23      Maintain Environment
                       *       All Activities

               Each authorization and profile within the critical Object must
               be tested. You may find some of the authorizations and
               profiles are empty, which means that authorizations and
               profiles are not used by the Company.

Procedures:
1. Check all authorizations & profiles linked to the critical authorization objects.
2. Review the individual's established user role to ensure access is required to complete
job responsibilities based on job title and department.
                               Pricing Fundamentals


1.   To display customer master records
      Logistics - Sales and Distribution – Master Data – Business Partners – Sold-to
         Party – Display – Display Centrally
2.   To display material master records
      Logistics – Sales and Distribution – Master Data – Products – Material –
         Other Material - Display
3.   To create a sales order
      Logistics – Sales and Distribution – Sales – Order - Create
4.   To create a material price condition record for material when sold by your sales
     organization and distribution channel
      Logistics – Sales and Distribution – Master Data – Conditions – Price –
         Material Price - Create
5.   To display the pricing conditions for the order item and list the gross price
     determined automatically during pricing
      Select the line item and then use the following menu path:
          Goto – Item - Conditions
6.   To create a customer-specific discount record with scale values for a customer
     when they purchase goods from your sales area
      Logistics – Sales and Distribution – Master Data – Conditions –
         Discounts/Surcharges – Customer – Create
          To enter the scale values, select the customer line and click on:
              Goto - Scales
7.   To display the pricing conditions for the order item and list all those determined
     automatically during pricing
      Select the line item and then use the menu path:
          Goto – Item - Conditions
8.   To display the configuration settings for conditions type ? in Customizing. To
     determine what calculation type and scale basis are assigned to this condition
     type.
      Tools – Business Engineer – Customizing – Implement.Project – SAP
         Reference IMG – Sales and Distribution – Basic Functions – Pricing – Pricing
         Control – Define Condition Types
Condition Techniques In Pricing

1.     To change a customer-specific price condition for a customer by entering a
       condition exclusion for net price in the condition record.
        Logistics – Sales/Distribution – Master Data – Conditions – Prices –
          Customer-Specific – Change
2.     To view pricing analysis for an order
        Select a line item and then use the following menu path:
           Item – Pricing – Edit – Analysis
3.     From the customer purchase order, create a standard sales order
       Branch to the pricing screen for the item and manually add a quantity discount
       and you must pick a condition type:
        Item – Pricing – Edit – New Entries
        To activate the condition by clicking on the (Enter) button
4.     Create a delivery for the order, pick completely and post goods issue
        Logistics – Sales/Distribution – Shipping –Delivery – Create
5.     Create an invoice for the delivery
        Logistic – Sales/Distribution – Billing – Billing Document – Create
6.     While viewing the invoice, examine the pricing details and determine what
       conditions were used to arrive at the net price.
        Select the line item and click on the (Pricing) button.
7.     View the Pricing Type Field in the IMG.
        Tools – Business Engineer – Customizing – Implement.Projects – SAP
          Reference IMG – Sales and Distribution – Billing – Billing Documents –
          Maintain Copying Control for Billing Documents.
           Choose “Copying Control: Delivery Slip to Billing Documents”.
           Select the billing documents
           Select Item Category and click on the (Details) button
Pricing Configuration

1.     Determine the value of the Customer Pricing Procedure field found on the Sales
       View of the master record
        Logistics – Sales/Distribution – Master Data – Business Partners – Sold-to
           party – Display – Display
            Select the Sales View and Click on the (Enter) button
            The field Customer Pricing Procedure has a value of ?
2.     Determine Sales document types
        Tools – Business Engineer – Customizing – Implement.Projects – SAP
           Reference IMG – Sales and Distribution – Sales – Sales Documents – Sales
           Document Header – Define Sales Document Types
        Select document type and click on (Details) button
3.     Determine what pricing procedure does the system determine if you create a
       standard order
        Select the following:
            Sales organization
            Distribution channel
            Division
            Document pricing procedure
            Customer pricing procedure
            Pricing procedure for the order
                Tools – Business Engineer – Customizing – Implement.Projects – SAP
                   Reference IMG – Sales and Distribution – Basic Functions – Pricing –
                   Pricing Control – Define and Assign Pricing Procedure
                Choose “Define pricing procedure determination”
                Then using the (Position) button, find the correct line in the table using
                   the values in the selected values above
                The result is the pricing procedure xxxxx
                    In customizing, when defining the pricing procedure, you can mark
                       a condition type as manual only (Man). As a result, the condition is
                       not automatically determined during pricing but can only be
                       entered manually.
4.     How to configure a condition type so that it no longer can be edited manually in
       the document.
        Tools – Business Engineer – Customizing – Implement.Projects – SAP
           Reference IMG – Sales and Distribution – Basic Functions – Pricing – Pricing
           Control – Define Condition Types
        Choose “Maintain condition types”
        Select the xxxx condition type and click on the (Details) button
        During customizing, you specify how or whether a condition type can be
           edited manually in the “Changes which can be made” fields.
        If the “Manual entries” field is set to D (Not possible to process manually),
           then the condition type cannot be manually edited in the sales document.
5.      Determine which condition table does a certain access sequence use
         Tools – Business Engineer – Customizing – Implement.Projects – SAP
           Reference IMG – Sales and Distribution – Basic Functions – Pricing – Pricing
           Control – Define Access Sequences
         Choose “ Maintain access sequences”
         Select the xxxx access sequence and click on the (Accesses ) button
         The result is the Access Sequence xxxx uses condition tables x,x, and x
         To determine the difference in the different access sequence
            Select access x and click on the (Fields) button to view the document
              fields. Then do the same for the other access y

6.       Create and Save a new condition table named xxx.
          Tools – Business Engineer – Customizing – Implement.Projects – SAP
             Reference IMG – Sales and Distribution – Basic Functions – Pricing – Pricing
             Control – Define Price Dependencies ( Condition Tables)
          Choose “Create Condition Tables”
    Enter xxx in the Table field and the condition table number created
    Select “with validity period”
    Enter a description
    Access Sequence: Create and Save a new access sequence Zxxx that includes the new
     condition table Yxxx.
          Tools – Business Engineer – Customizing – Implement.Projects – SAP
             Reference IMG – Sales and Distribution – Basic Functions – Pricing – Pricing
             Control – Define Access Sequences
          Choose “Maintain access Sequences”
          Click on the (New Entries) button
          Enter access sequence Zxxx and a description
          Click on the (Enter) button, then click on the green arrow button
          Select your access sequence and click on the (Accesses) button
          Click on the (New Entries) button
          Enter access number xx and table Yxxx

7.      Create a new Customer Pricing Procedure value.
         Tools – Business Engineer – Customizing – Implement.Projects – SAP
           Reference IMG – Sales and Distribution – Basic Functions – Pricing – Pricing
           Control – Define and Assign Pricing Procedures
         Choose “Define Customer Determination Procedure”
         Click on the (New Entries) button
         On the next screen, enter your Customer Pricing Procedure value and a
           description
8.      Changing the customer to use the new pricing procedure
         Logistics – Sales and Distribution – Master Data – Business Partners – Sold-to
           Party – Change
         Enter the number for the Customer and the default Sales Area
        Select the Sales view and click on the (Enter) button
        Change the customer pricing procedure field to the new value.

9.   Condition Records, Create and Save a surcharge condition record
      Logistics – Sales and Distribution – Master Data – Conditions –
        Discounts/Surcharges – Others – Create
      Enter condition type xxxx and click on the (Enter) button
      Enter the appropriate values, then save the condition record
Special Functions

1.     It is important that only one of the two possible freight conditions is used on an
       order. One way to accomplish this is by using exclusion groups.
        Tools – Business Engineer – Customizing – Implement.Projects – SAP
            Reference IMG – Sales and Distribution – Basic Functions – Pricing – Pricing
            Control – Condition Exclusion – Condition Exclusion For Groups Of
            Conditions
        Choose “Define conditions exclusion groups”
        Use the (New Entries) button to add exclusion group xxxx and xxxx

2.     Assign condition type yyyy to exclusion group xxxx
        Tools – Business Engineer – Customizing – Implement.Projects – SAP
          Reference IMG – Sales and Distribution – Basic Functions – Pricing – Pricing
          Control – Condition Exclusion – Condition Exclusion For Groups Of
          Conditions
        Choose “Assign condition types to the exclusion groups”
        Use the (New Entries) button to add assignments of conditions type yyyy to
          exclusion group xxxx

3.     Assign the exclusion groups to pricing procedure

          Tools – Business Engineer – Customizing – Implement.Projects – SAP
           Reference IMG – Sales and Distribution – Basic Functions – Pricing – Pricing
           Control – Condition Exclusion – Condition Exclusion For Groups Of
           Conditions
          Choose “Maintain condition exclusion for pricing procedures”
          Double-click on the pricing procedure xxxx. Click on (New Entries) button to
           add the necessary entries. Use a sequence number of xx, a condition
           exclusion procedure of D, an exclusion group value of xxx
Special Condition Types

1.    If you require that material x not be sold for less than a net price of $$$ for the
      next three months. Create and save a minimum price condition record for this
      material with a condition type zzzz
       Logistics – Sales and Distribution – Master Data – Pricing – Prices – Others –
          Create
       Enter condition type zzzz and click on the (Enter) button

2.    Assignment of a customer to a certain buying group customer hierarchy under a
      certain division

         Logistics – Sales and Distribution – Master Data – Business Partners –
          Customer Hierarchy – Change
         Enter Customer hierarchy category z and click on the (Execute) button
         Click on the (Create Assignment) button and enter the data of
           Hierarchy Node
           Sales Area
           Higher Level Hierarchy
           Higher Level Sales Area
               Click on the (Copy) button and this customer is assigned to the
                 division
Agreements

1.    Create and save a promotion
       Logistics – Sales and Distribution – Master Data – Agreements – Promotion –
         Create

2.    Create a sales deal with reference to the promotion
       Logistics – Sales and Distribution – Master Data – Agreements – Sales Deal –
         Create

3.    Sales deal restricted to specific customers.

         Logistics – Sales and Distribution – Master Data – Agreements – Sales Deal –
          Change

4.    Create a delivery for the order

         Logistics – Sales and Distribution – Shipping – Delivery – Create Delivery –
          Save and Subsequent Functions – Transfer Order
         Enter warehouse
         Save the Transfer Order
         Logistic – Sales and Distribution – Shipping – Delivery – Change
           Enter the delivery number and click on the (Post Goods Issue)

5.    Create an Invoice for the delivery

         Logistics – Sales and Distribution – Billing – Billing Document – Create
         Enter the delivery document number and click on the (Execute) button
Rebates

1.    On the Billing view of the customer master record, the Rebates field should be
      marked
2.    Create a Material rebate agreement for a customer
       Logistics – Sales and Distribution – Master Data – Agreements – Rebate
         Agreements – Create
       Enter the appropriate values




4.0   Reports

RFDKLI10            Search for customers without credit limits
RFDKLI20            Restructure credit limits of selected credit monitoring areas
RFDKLI30            Brief overview of credit limit
RFDKLI40            Overview of credit limit (expanded)
RFDKLI41            Credit master sheet
RFDKLI50            Change in assets
RFDKLIAB            Display changes in credit management for multiple accounts
RFDKLIAB            Display changes for multiple accounts
RFKABL00            List changes in vendor master records for multiple accounts
RFSABL00            List changes in G/L account master records for multiple accounts
RFZALI00            Reports on generation of the payment proposal list
RFZALI10            Reports on generation of exception list
RFPVEB              Parked invoices
RFKABL00            Vendor master record changes
RFDOPR10            Aged receivable summary
RFDOPR00            Aged receivable detail

5.0   Tables

T043G               Customer/Vendor tolerance
A044                Vendor master
LFA1
LFB1                Vendor master by company code
BLFA1                     General Vendor master
LFBK                Vendor master bank data
LFC1                Vendor master transactions
LFM1                Vendor master record purchasing
LFM2                Vendor master purchasing data
6.0   Key IMG Settings
Credit Limit Check    IMG – Sales and Distribution > Basic Functions > Credit
                      Processing > Define credit limit check by sales document type.

Sales Incompletion Log     IMG – Sales and Distribution > Basic Functions >
                     Incompletion Control for Sales Documents > Define Status Groups

                      Run Logistics > Sales and Distribution > Sales > Environment >
                      Document Analysis > Incomplete documents

Availability Check Material availability

                      When a quote is made the system checks inventory to see if the
                      item is available in stock and if the item can be delivered within
                      the time frame requested by the customer.

                         The date by which sufficient quantities of an item must be
                          available for picking to begin the delivery process
                         This date is calculated by the SAP R/3 system based on the
                          loading, transit and pick-pack times.

Credit Check          several credit control areas are assigned to risk categories. The
                      system will automatically check a sales order if the customer is
                      assigned a risk category. The order will still be accepted but the
                      shipment will be blocked from delivery.

                      "Credit control limits" can be set by sales document to one of four
                      settings:

                         D =        Automatic credit check for a total of open orders,
                          open
                                           deliveries, open receivables and open items.

                         A =        Warning when credit limit has been reached

                         B =        Error Message

                         C =        Delivery Block

Billing Blocks        Sales documents can be configured with Billing Blocks to prevent
                      them from being processed on the billing due list. Documents such
                      as Credit memos and Returns are ones that should be automatically
                      blocked until approved for billing.

								
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