Content of audit report Audit items

Statement of financial position Disclosure

Statement of profit or loss and

other comprehensive income Disclosure

Change of capital Disclosure

Cash flow statement Disclosure
Cash flow statement Disclosure

Cash flow statement Disclosure:Non-cash acti

Disclosure:Foreign
Cash flow statement exchange
Disclosure:Changes in
Cash flow statement working capital

Disclosure: Income tax

Cash flow statement paid
 Disclosure: Interest
Cash flow statement paid

Cash flow statement Disclosure

Disclosure:Lease
Cash flow statement payment
Disclosure:Effect of
foreign exchange in
Cash flow statement cash in banks

1. General Disclosure
Disclosure:Completion
1. General date
2. Summary of significant
accounting policy Disclosure: General

Disclosure:
Classification
2. Summary of significant Financial assets and
accounting policy liabilities
2. Summary of significant Disclosure: Accounting
accounting policy policies
2. Summary of significant
accounting policy Disclosure: Inventory
2. Summary of significant Disclosure: Property,
accounting policy plant and equipment
Disclosure: Intangible
Intangible Assets Assets
2. Summary of significant Disclosure: Foreign
accounting policy currency transactions

2. Summary of significant Disclosure: Foreign

accounting policy currency transactions
3. Critical accounting
judgements and key sources of Disclosure: Foreign
estimation uncertainty currency transactions

1.Beginning balance
Cash on hand and in banks check

2 Analytical
Cash on hand and in banks Procedures

3.Cash on hand- cash

Cash on hand and in banks opnam check

4Cash in banks-
Cash on hand and in banks confirmation

5.Foreign currency
Cash on hand and in banks transactions

Disclosure: Cash on
Cash on hand and in banks hand and in banks
Trade receivables,Other 1Beginning balance
receivables check

Trade receivables,Other 2 Analytical

receivables Procedures

Trade receivables,Other
receivables 3 Confirmation
Trade receivables,Other
receivables 4 Aging

Trade receivables,Other
receivables 5Classification

Trade receivables,Other 6 Foreign currency

receivables revaluation
Trade receivables,Other 7 Related party
receivables transactions

Trade receivables,Other
receivables Disclosure

Trade receivables,Other
receivables Disclosure
1Beginning balance
Inventories check

Inventories 2Analytical Procedures

Inventories 3.Stocktaking
Inventories 3.Stocktaking

Inventories 3.Stocktaking

Inventories 3.Stocktaking

Inventories 3.Stocktaking/Cut off

Inventories 4.Existence

5.Cost
formulas(methods)
Inventories ISA2 23-25/PSAK14

6.Cost accounting
Inventories

Inventories 7.Net realizable value

Inventories 7.Net realizable value

Inventories Disclosure

Inventories Disclosure
Beginning balance
Advances check

Existence -Vouching
Advances purchase payments

Advances Classification

Advances Valuation

Advances Disclosure
Beginning balance
Prepaid expenses check

Prepaid expenses 2Analytical Procedures

Existence -Vouching to
Prepaid expenses gather information

Prepaid expenses Classification

Prepaid expenses Classification

Valuation and
Prepaid expenses allocation
Valuation and
Prepaid expenses allocation
Prepaid expenses Disclosure
Property, plant and Beginning balance
equipment/Intangible assets check

Property, plant and Existense-physical

equipment/Intangible assets verification

Property, plant and

equipment/Intangible assets Vouching

Property, plant and

equipment/Intangible assets Cut off

Property, plant and

equipment/Intangible assets Depreciation

Property, plant and

equipment/Intangible assets Classification

Property, plant and

equipment/Intangible assets Classification

Property, plant and

equipment/Intangible assets Disclosure
Property, plant and
equipment/Intangible assets Disclosure
Beginning balance
Trade payables/other payables check

Trade payables/other payables Analytical Procedures

Trade payables/other payables Confirmation

Trade payables/other payables Payment schedule

Unrecorded liabilities
Trade payables/other payables check

Trade payables/other payables Classification

Foreign currency
Trade payables/other payables revaluation
Related party
Trade payables/other payables transactions
Trade payables/other payables Disclosure

Trade payables/other payables Disclosure

Beginning balance
Accrued expenses check

Accrued expenses Analytical Procedures

Accrued expenses vouching

Unrecorded liabilities
Accrued expenses check

Accrued expenses Valuation

Accrued expenses Disclosure

Accrued expenses Disclosure

Beginning balance
Advances from customers check

Advances from customers Vouching

 Valuation and
Advances from customers allocation

Advances from customers Classification

Advance from customers Disclosure

Beginning balance
Loans check

Loans Analytical Procedures

Existence and
Loans accuracy

Loans Confirmation

Loans Valuation

Loans Classification

Loans Subsequent events

Loans Disclosure
Loans Disclosure
Beginning balance
Lease payables check

Accuracy and
Lease payables assessment
Lease payables Calculation accuracy

Lease payables Disclosure

Lease payables Disclosure

Beginning balance
Taxation check
 Existense and
Taxation accuracy

Existense and
Taxation accuracy

Taxation CIT calculation

Taxation Deferred tax

Taxation Loss carry forward

Taxation Claim for tax refund

Taxation Tax audit

Beginning balance
Employee benefits check

Employee benefits Assessment

Employee benefits Actuarial report

Employee benefits Disclosure

Employee benefits Disclosure

Derivatives Existence

Derivatives Disclosure

Derivatives Disclosure

Beginning balance
Capital check

Capital Accuracy

Capital Existence

Capital Classification
Capital Disclosure

Capital Disclosure

Sales Analytical Procedures

Accuracy and
Sales existence

Sales Cut off

Sales Classification

Sales Disclosure

COGS Analytical Procedures

Accuracy and
COGS existence

COGS Classification

COGS Disclosure

COGS Disclosure
COGS Disclosure

Operating expenses Analytical Procedures

Operating expenses Classification

Operating expenses Disclosure

Operating expenses Disclosure

Operating expenses Disclosure

Other income/expense Analytical Procedures

Other income/expense Classification

 Accuracy and
Other income/expense existence

Accuracy and
Related party transactions existence

Related party transactions Disclosure

Finance risk management
objective and policies Disclosure:Credit risk

Finance risk management
objective and policies
Finance risk management
objective and policies
Disclosure: Market
risk-foreign exchange
currency risk
Disclosure: Market
risk- interest rate risk

Finance risk management

objective and policies Disclosure
Finance risk management Disclosure: Capital
objective and policies management

Monetary assets and liabilities

denominated in foreign
currencies Disclosure
Financial instruments Disclosure

Supplemental disclosure on non

cash activities Disclosure

Subsequent events Disclosure

Points to be checked checked by Date ref WP reviewed by
footing, tie up with related Notes (note’s number and its
figure).

footing, tie up with related Notes (note’s number and its

figure).

footing, tie up with related Notes (note’s number and its

figure).
Tie up with BS and PL.
Prepare Cash Flow worksheet (Indirect method).

CASH FLOWS FROM OPERATING ACTIVITIES

PL accounts of non-cash activities should be tied up with
PL and the related Notes (note’s number and its figure)
such as:
-depreciation and amortization (tie up with Notes of
Property, plant and equipment, Intangible assets, COGS
and Operating expense)
-employee benefit expense (tie up with Notes of
Employee benefits, COGS, Operating expense)
-gain/loss of Property, plant and equipment sales (tie up
with Note of Property, plant and equipment)
- loss/gain from write-off BS accounts (tie up with Note of
the related accounts)
- any other provision accounts , if any (tie up with Note of
the related accounts)

Foreign exchange in operating activities should consist of:

- forex gain/loss from revaluation of cash in hand and in
banks in foreign currencies.
- forex gain /loss from revaluation of monetary
assets/liabilities classified to investment/financial
activities(e.g. loan)
Changes in working capital consist of mutation of BS
account, but the items below should be adjusted:

Income tax paid should be:

+)Beginning balance of Tax payable PPh25/29 for
corporate income tax
+)Current income tax in PL
-)Ending balance of tax payable PPh25/29 for corporate
income tax
Interest paid should be:
+)Accrued Interest-beginning balance
-)prepaid interest beginning balance
+)Interest expenses in PL
-)Accrued interest ending balance
+)Prepaid interest ending balance

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property and equipment should be:
+)Addition from Note of Property and Equipment
+)Beginning balance of other payable for property and
equipment purchase
-)Ending balance of other payable for property and
equipment purchase
The balance of other payable for Property and
equipment purchase should be disclosed as
supplemental information of non cash activities in the
title of “Significant non-cash investing activities”, if the
amount is significant.

CASH FLOWS FROM FINANCING ACTIVITIES

'Lease payment should be:
+)Beginning balance of lease payable
+)Addition from lease
+)Movement from revaluation of foreign exchange
+)Reclassification(if any)
-)Ending lease payable
This should be disclosed as supplemental information of
non cash activities in the title of “Significant non-cash
investing activities”
"Effect of foreign exchange in cash in banks" should be
forex gain/loss from revaluation of cash in hands and
banks in foregn currencies.

Description in "General", including information of BOD

and BOC should be confirmed with the latest Akta and
approval from the ministry of law and human rights.

Completion date should be the date of audit opinion.

Follow the latest guide report (including New Accounting
Standards)

Check consistency between the presented account names

and Note of “Financial risk management”

Check WP if the presented accounting policies are tied up

with each account in BS and PL
Check WP if the presented evaluation method (FIFO or
Average) is appropriate.

Check WP if the useful lives are selected appropriately.

Check WP if the useful lives are selected appropriately.

Check if exchange rates are tied up with BI middle rate at
year- end.

Check if exchange rates are consistent with Note of

Foreign exchange currency risk and Monetary assets and
liabilities denominated in foreign currencies.

Check consistency with the related notes (note’s number

and those figures).

Check if the beginning balance in GL is the same as the

balance in last year's audit report.

Compare to the last year's balance per account/currency,

check if there is any additional account to exist.

Check the balance of petty cash with the result of cash

count at the year end. If the date of cash count is after the
year end, check the movement of petty cash from the
year end until the date of cash count.

Send confirmation letters to all bank and check the

balance in book with answer of confirmation. If there is
any difference between balance in book and confirmation
answer, check the reason and prepare the bank
reconciliation.

For account in foreign currencies, check if the balance in

IDR is revaluated by year end exchange rate. Amounts
listed below should be mentioned in WP
-Balance by original currency
-Exchange rate
-Balance by IDR
-Balance in book
-Difference(if any)

Need to check if the balance is tied up with the related

notes like below:
- Financial risk management objective and policies - Credit
risk
- Monetary assets and liabilities denominated in foreign
currencies
- Financial instruments
Check if the beginning balance in GL is the same as the
balance in last year's audit report.
Compare to the last year's balance per customer
and check the reason when identified fluctuation is a
significant amout.

Obtain the details of AR and OR and select customers

which confirmation letters should be sent. Basically
selection basis should be like below:
((Total balance of AR and OR)-(total balance which subject
to confirmation letter))<Materiality
1.Obtain Aging list and check the accuracy of the aging
information on a sample basis.
2.Need confirm collectability if there is any long
outstanding(more than 3 months) about AR,OR.
3.If the date of collection determined by the
invoice/agreement is more than 1 year, it should be
reclassified to non-current assets.
4.Prepare the summary of aging for disclosure.

1.Check if the classification to AR and OP is correct.

AR: receivable from sales transactions
OR: receivables from other than sales transactions
2.Need to check the nature of transactions related to OR

If there is balance in foreign currency, check the

calculation of revaluation based on the exchange rate at
the end of the year:
- balance in original currency
- exchange rate
- balance in IDR after exchange
- balance in book
- difference (if any)
If there is any balance to related parties, the balance
should be separated from AR/OR for disclosure.

In Note of report, information listed below should be

disclosed:
-breakdown of AR, OR per customer(listed from highest to
lowest)
-summary of Aging
-balance per currency
-provision for doubtful AR(If any)

Check to tie up with the elated notes such as the

following:
- Related party transactions
- Financial risk management objective and policies - Credit
risk
- Monetary assets and liabilities denominated in foreign
currencies
- Financial instruments
Check if the beginning balance in GL is the same as the
balance in the last year 's audit report.

Compare to the last year's balance per type of inventories

and check the reason when identified fluctuation is a
significant amout.

1.Attend the stocktaking held by the company at the year

end.
2.If the date of stocktaking is after the year end, the
movement of inventory from the year end until the
stocktaking date should be checked with the supporting
documents.
3.If there is any difference between a quantity in book
and the actual quantity based on stocktaking, need to
obtain the reconciliation of stocktaking prepared by the
client and consider if it should be made adjustment.

4.If the company outsources other companies to manage

inventories, or some inventories are stored by other
companies(e.g. already delivered to a customer, but sales
was not yet recognized), should consider if it is necessary
to send confirmation letters to the outsourcing company .

5.If inventories like below, need to obtain supporting

documents:
- goods in transit: shipment date should be before the
year end
- goods delivered to customer, but sales not yet
recognized: delivery date and sales date(after year end)

6.Check transactions near the end of the year if

transactions have been recorded in the correct
accounting
period
vouching costs of purchase transactions on a sumple
basis.

Check if the unit price of inventory is calculated based on

what kind of cost formula. The cost of inventories, other
than using specific identification method of their
individual costs, should be assigned by using the first‑in,
first‑out (FIFO) or weighted average cost
formula(method).

For manufacturing companies, obtain supporting

documents how to calculate the cost of finished
goods/work in progress. For those companies, check the
result of calculation (allocation) of conversion costs to
FG,WIP and COGS.

1.Check the mutation of items comparing to the last

year's data. If there is any slow moving/no moving item,
confirm with the company about possibility of sale or use.
If there is no possibility , consider recognizing its
obsolescence loss
2.Check the unit price of finished goods/work in process is
lower than net realizable value(NRV=sales price - sales
expenses).
In Note of report, information listed below should be
disclosed:
-breakdown per type of inventories
-condition of insurance for inventories (if any)
-inventories for collateral security (if any)

Check to tie up with related notes such as the following:

- COGS (beginning balance, ending balance)
Check if the beginning balance in GL is the same as the
balance in the last year's audit report.

Obtain supporting documents and check the content of

each payment and check when each balance of advance
payments is settled(reclassified to inventory or other
account)

check the nature of each advance.

- advance payments for purchase inventory
- advance payments for purchase property and equipment
should be reclassified to construction in progress
- advance payments to employee: need to check the
internal rule of settlement
Check if there is long outstanding balance, confirm the
reason and determine if the balance should be reclassified
to CoGS/expense.

If the balance is above materiality, below information

should be disclosed in Note:
- breakdown of account per type or company(listed from
highest to lowest)
Check if the beginning balance in GL is the same as the
balance in the last year's audit report.

Compare to the last year's balance per type or company

and check the reason when identified fluctuation is a
significant amout.

Obtain the details of prepaid expenses prepared by the

client and the supporting documents(agreements,
invoices) and check the amount, payment schedule, term
of contract.

If the contract term is more than 1 year, portion for more

than 1 year should be classified to non-current assets.
If any lease agreement subject to PSAK73, it should be
classified to Rights-of-use assets.
Check the calculation of amortization is appropriate,
based on the agreements(e.g. a term of contract)
Check if there is any contract which has been already
expired/canceled.
If the balance is above materiality, below information
should be disclosed in Note:
- breakdown of account per type or company (listed from
highest to lowest)
- current, non-current portion
amortization should be tied up with Notes of COGS and
Operating expenses
Check if the beginning balance in GL is the same as the
balance in the last year's audit report.
Check the physical existence and condition of assets at
the year end(same as stocktaking) or during the field
work.

Check newly built,purchased assets and disposal assets on

a sample basis. Consider the following points:
- date of start using(start depreciation)
- cost
-useful life

Check the condition of Construction in progress when CIP

can be reclassified to other assets and started
depreciation. Depreciation of an asset begins when it is
available for use(PSAK16. 55)

Check the calculation of depreciation

- depreciation should be started from the month of
acquisition
- depreciation for disposal asset should be terminated at
the month of disposal

lease agreements (office, warehouse, rental car etc.)

should be considered if those contracts should be subject
to PSAK73. Check items are:
- lease term
- early cancelation penalty
-total amount of lease payment
If Property, plant and equipment is for the purpose of
non-operating (e.g. for rental income), it should be
reclassified to Investment property.

Information listed below should be disclosed in Note;

- Beginning/addition/disposal/reclassification/Ending
Cost/Accumulated depreciation
- depreciation in COGS and operating expense
- Disposal of Property , plan and equipment
Cost: XXX-1
Accumulated depreciation: -XXX-2
Book value: XXX-3=1-2
Sales Price: XXX-4
Gain/loss of disposal XXX-5=4-3
- Condition of insurance, collateral
Check to tie up with related Notes such as the following:
-Cash flow statement (depreciation, acquisition property
and equipment, proceed from sales of property and
equipment)
- COGS, operating expenses (depreciation and
amortization)
Check if the beginning balance in GL is the same as the
balance in the last year's audit report.

Compare to the last year's balance per type or company

and check the reason when identified fluctuation is a
significant amout.

Obtain the details of AP and OP and select customers

which confirmation letters should be sent. Basically, basis
of selection should be like below:
(Total balance of AP and OP)-(total balance which is
subject to confirmation letter))<Materiality

1.Obtain Aging list of AP and OP and check the payment

schedule and if there is any payable which the due date
has been passed or not. If the date of payment
determined by the invoice/agreement is more than 1
year, it should be classified to non-current liabilities.
2.Prepare the summary of aging for disclosure.

Check invoices received by the company from the year

end to the audit field work. If there is any
purchase/expense which should be recognized in the
fiscal year but those are not recognized yet, determine
PAJE considering materiality.

1.Check if the classification to AP and OP is correct.

AP: payables for purchases of inventories /COGS
transactions
OP: payables from other than purchases /COGS
transactions
2.Need to check the nature of transactions related to OP.
If OP is related to purchases of property, plan and
equipment/intangible assets, those OP should be adjusted
for Investment cash flow activities.

If there is balance in foreign currencyies, check the

calculation of revaluation based on the exchange rate at
the end of the year:
- balance in original currency
- exchange rate
- balance in IDR after exchange
- balance in book
- difference (if any)
If there is any balance to related parties, those balance
should be separated for disclosure.
In note of report, information listed below should be
disclosed:
-breakdown of AP, OP per supplier/vender (listed from
highest to lowest)
-summary of Aging
-balance per currency

Check to tie up with related Notes such as the following:

- Related parties transactions
- Financial risk management objective and policies -
liquidity risk (repayment schedule)
- Monetary assets and liabilities denominated in foreign
currencies
- Financial instruments

Check if the beginning balance in GL is the same as the

balance in the last year's audit report.

Compare to the last year's balance, check if there is any

additional accrued expense should be recognized. Typical
accrued expense is:
- accrued salary
- accrued professional fee
- accrued interest
- accrued bonus
Check agreements/invoices if there is any additional
accrued expense should be recognized

Check invoices received by the company from the year

end to the audit field work. If there is any expense which
should be recognized in the fiscal year but those are not
recognized yet, determine PAJE considering materiality.
Check the revaluation if there is accrued expense in
foreign currency.

If the balance is above materiality, below information

should be disclosed in note:
- breakdown of account per type or company (listed from
highest to lowest)

Check to tie up with related Notes such as the following:

- Related parties transactions
- Financial risk management objective and policies -
liquidity risk (repayment schedule)
- Monetary assets and liabilities denominated in foreign
currencies
- Financial instruments
Check if the beginning balance in GL is the same as the
balance in the last year's audit report.
Obtain supporting documents and check when advance
will be realized as sales (reclassified to sales or other
account).
Check if there is long outstanding balance. If any, check
the reason and consider making an adjustment like above.

Check the nature of each advances.

- advances received from customer
- advances received from non customer→check the
nature
If the balance is above materiality, information below
should be disclosed in note:
- breakdown of account per type or company
Check if the beginning balance in GL is the same as the
balance in the last year's audit report.
Compare to the last year's balance, check if there is any
additional loan to recognize.

Check all existing loan agreements with the list of loan

prepared by the client. Consider the following points:
- date of agreement
- bank/related party name
- principal amount
- interest rate
- maturity date
- repayment schedule

1.Send confirmation letters to all banks and related

parties. Then, check the balance of each loan in book with
the confirmations responses.
2. Reconcile any difference, if it exists.

If loan in foreign currency, it should be revaluated based

on the exchange rate at the year end.
- balance in original currency
- exchange rate at the year end
- balance in IDR
- balance in book
- difference(if any)
forex gain/loss from revaluation should be disclosed as
non-cash flow movement
If a maturity date is more than 1 year after the year end,
the amount paid after 1 year period should be reclassified
to non-current liabilities.
If the maturity date is coming within 3 months after the
year end or before the opinion date, check if the
agreement has been renewed.

Information below should be disclosed in Note:

- the details of loan balance per bank/related parties and
per current/non-current portion
- summary of loan agreements (date of agreement,
bank/related party name, amount of principal, interest
rate, maturity date, balance as of the end of the year in
original currency and IDR equivalent..
Check to tie up with related Notes such as the following:
- Cash flow statement
- supplement information about non-cash flow activities
- Related parties transactions
- Financial risk management objective and policies -
liquidity risk (repayment schedule)
- Monetary assets and liabilities denominated in foreign
currencies
- Financial instruments
Check if the beginning balance in GL is the same as the
balance in the last year's audit report.

1.Check all leasing agreements and prepare the summary

including information below:
- name of lessor
- date of agreement
- rent per month
- payment schedule
- lease term
- condition of early cancelation
2.Assess if a leasing agreement is subject to PSAK 73
Check the calculation sheet prepared by the client .

Need to summarize information like below;

- interest rate
- interest expense
- repayment schedule based on undiscounted amount
- current/non-current classification

Check to tie up with related notes such as the following:

- Cash flow statement
- supplement information about non-cash flow activities
- Financial risk management objective and policies -
liquidity risk (repayment schedule)
- Monetary assets and liabilities denominated in foreign
currencies(if any lease in foreign currency)
- Financial instruments

Check if the beginning balance in GL is the same as the

balance in last year's audit report.
-Prepaid tax
- Claim for tax refund
- Deferred tax assets
- Tax payables
- Deferred tax liabilities
Check the supporting documents with the above items.
If there is any difference between balance in book and the
payment evidence(prepaid tax)/SPT(payable), need to
reconcile.
Points to be checked are as follows:
- Prepaid PPh22: it cannot be credited if there is no
supporting documents(PIB,BPN( bukti penerimaan
negara))
- Prepaid PPh23: it cannot be credited if there is no
supporting document(Bukti Potong)
- Prepaid PPh21: PPh21 should be consistent with pay roll
calculation by the company.
- VAT IN/VAT OUT: typical reason of difference between
book and SPTare as follows:
* timing difference
* cancelation/amendment of faktur pajak

If there is any transaction like below with companies

outside Indonesia, it is possible to be subject to PPh26.
- interest payments
- dividend payments
- technical assistant fees/management fees/other
consulting fee payments
In this case, need to check;
- if the company has the certificate of domicile(COD)
issued by the tax office which the counterpart is located(if
the counterpart is located in Japan, COD issued by tax
office in Japan should be obtained)

Key items of CIT calculation provided by the company are

as follows:
-typical temporary differences:
*(employee benefit expense)-(employee benefit paid)
*depreciation due to difference of useful life between
commercial and fiscal
*provision of bad debt, bonus etc.
-typical permanent differences:
*benefit in kind (apartment for expats, income tax paid
for expats, travel expense for non business related, HP
expenses, rental car expense,welfare expense etc)
*tax penalty
*Donation
-tax payable PPh29 = (taxable income)× tax rate-(Prepaid
22,23,25)
Check the calculation of deferred tax. Consider the
following points:
- deferred tax is consistent with temporary difference
- balance of deferred tax assets/liabilities are tied up with
the following formula:
(the difference of book value between in commercial and
fiscal)x (applicable CIT rate)
- applicable tax rate should be considered when the
temporary difference will be realized(e.g. if the temporary
difference is planned to realize in FY2021, the tax rate for
DTA calculation should be 22%. if the temporary
difference plans to realize after FY2022, the tax rate for
DTA should be 20%.

If the company has loss carry forward, we need to check

the following:
- loss carry forward expires in 5 years, so it should be
considered if the company can obtain taxable income
within the next 5 years
- a loss carry forward can be subject to deferred tax asset
if the loss carry forward can be offset with taxable
incomewithin the next 5 years
- since the amount of loss carry forward is
amended/written off as a result of tax audit, we need to
pay attention if the company takes tax audit or not.

-If there is overpayment of the corporate income tax after

CIT calculation, we need to confirm if the company
requests to claim tax refund or not. If not, prepaid PPh22,
23 and 25 should be reclassified to expense.
-If there is outstanding claim for tax refund from the
previous year, we need to check the condition of tax audit
and collectability of the tax refund.

Ask the client if the company takes tax audit during the
fiscal year or not. If the tax audit is already finished during
the audit, the impact from tax audit should be adjusted.
- penalty charged as a result of tax audit
- additional CIT charge as a result of tax audit
- correction of loss carry forward
- reduction tax refund
Check if the beginning balance in GL is the same as the
balance in the last year's audit report.

If the impact of employee benefits is material, those

employee benefits should be recognized based on PSAK
24 and request the company to get a certified actuary's
report.
Check the actuarial report prepared by the actuary
considering the following points:
- beginning balance of employee benefit is correct or not
- number of employee is correct or not
- discount rate is appropriate or not
- benefit paid is based on the actual payment by the
company or not
- plan asset is based on the report provided by the
insurance company(if any)
- actuarial gain/loss is rational considering movement of
discount rate/salary increase or other assumptions.
- if there is other long term benefit, we need to check if
the company has other special employee benefit
programs and need to confirm with the actuary why other
long term benefit is recognized.
Note of employee benefits should be based on the
actuarial report.

Check to tie up with the related notes such as the

following:
- Cash flow statement(employee benefit expense/benefit
paid)
- Taxation (deferred tax asset)

-Need to confirm with the client if there is any additional

agreement with banks and financial institutions such as
forward contracts, swap contracts or any other
delivertives. If any, accounting treatment should follow
the accounting standard regarding financial instruments.
- Need to check bank confirmation carefully if there is any
contract other than loan and saving/current account.
Note of delivertives should be based on the report issued
by the banks.

Check to tie up with related notes such as the following:

- Financial instruments
Check if the beginning balance in GL is the same as the
balance in the last year's audit report(Especially for the
balance of retained earnings)
Check the composition of shareholders with the latest
Akta and approval from the ministry of law and human
rights.
If any capital increase, we check if the capital increase has
been already authorized by the Akta and approval from
the ministry of law and human rights.

If any capital increase in foreign currencies, the amount

recognized as capital should be the amount shown in the
Akta, and the difference with actual received from
shareholders should be recognized as additional paid in
capital.
Composition of shareholders should be disclosed as Note

Check to tie up with related notes such as the following:

- Cashflow(if any capital increase
- Financial risk management objective and policies -
capital management
Compare with the amount of sales in the previous year
and analize the reason of mutation.

Obtain the supporting documents of sales and check with

its accuracy of sales;
- invoices (the amount of sales and customer)
- delivery note (the timing of sales recognition)
- cash receipt (collectibility of receivables)
Check the sales transactions near the end of the year if
sales is recognized correctly or not.

If any sales of non-operating assets like below, it should

be reclassified to proper account;
- sales of fixed assets-other income
- sales of scrap or waste-other income
- rental income-other income
- discount of purchase-offset with purchase
If there if any sales to related parties, it should be
disclosed in Note of related party transactions notes
Compare with the amount of each account of COGS
previous year and analize the reason of mutation
Check if the inventory is reclassified to COGS when the
related sales is recognized correctly.

Check the accuracy of the classification items of expenses

such as COGS or operating expenses:
- depreciation(depreciation from assets for manufacturing
should be COGS etc.)
- salary and other labor costs (can be classified based on
the department)
- other overhead cost(based on the department)

For mapping for disclosure, need to consider;

- comparability of account with the previous year
- similar nature of account should be integrated(e.g.
salary, and other allowance should be integrated as
"Salary and allowances")
If any purchase from rthe elated parties, it should be
disclosed in Note of related party transactions
Check to tie up with related notes such as the following:
- Inventory (the beginning & ending balance of inventory)
- property, plant and equipment, intangible assets
(depreciation and amortization)
- employee benefits (employee benefit expense)
- Cash flow statements (depreciation and amortization,
employee benefit expense)
- related partytransactions
Compare with each account of operating expenses of the
previous year and analize the reason of mutation.

check the accuracy of classification items of operating

expenses or operating expenses ;
- depreciation(depreciation from assets for the indirect
department(accounting etc.) should be operating expense
etc.)
- salary and other labor cost (can be classified based on
the department)
- other overhead cost(can be classified based on the
department)

For mapping for disclosure, we need to consider;

- comparability with the previous year
- similar nature of account should be integrated(e.g.
salary, and other allowance should be integrated as
"Salary and allowances")
If any expense (e.g. management fee/technical assistance
fee etc.) from the related parties, it should be disclosed in
note of related party transactions

Check to tie up with the related notes such as the

following:
- property, plant and equipment, intangible assets
(depreciation and amortization)
- employee benefit (employee benefit expense)
- Cash flow statements (depreciation and amortization,
employee benefit expense)
- related party transactions
Compare with the previous year's figures of each account
and analize the reason of mutation

Generally, the items classified to other income/expense

are as follows:
- financial income/expense (interest income/expense)
- foreign exchange gain or loss
- gain/loss from fixed asset disposal/sales
- income from non-operating sales
- other expense which are not classified to COGS or
operating expense
-income/expense which is not material.
If there is any material or and extraordinary amount in
other income/ expense , we need to check the supporting
documents and the nature of transaction.

Need to reconcile the amount of related party

transactions with the following items:
- receivables/payables based on the aging list
- sales/purchase/expense based on GL
- response to confirmation letter from all related party
- management confirmation about related party
transactions

Check the structure of related parties and disclose

information of the nature of the related parties:
* ultimate parent
* direct parent (investment majority of the company's
shares directly)
* entity under common control (entity under the
ultimate parent)
* shareholder (investment to the company but not
majority)
* affiliate (entity which the company invests but not
majority)
* subsidiary (entity which the company invest majority
of shares)
Check if Note should be tied up with other notes of
financial assets (Cash, AR,OR, deposit etc.)

Check if the note is tied up with Manetary assets and

liabilities, Note 2(foreign exchange rate)

Check if the note is tie up with notes of loan and lease

Disclosure of payment schedule based on undiscounted

amount, we need to check the following items:
-AP,OP: need to follow the payment schedule based on
the aging list
- Accrued expense: depends on the nature of accrued
expenses (e.g. salary: less than 3 months, interest:
depends on the repayment schedule)
- loan and lease payable: the amount of interest payment
should be included in repayment schedule.

Should be tied up with Equity in BS

Should be tied up with related notes:

- balance in original currency
- balance in functional currency
- exchange rate
Should be tie up with related Notes:
- CV: tie up with BS balance and related Notes
- FV: if the balance is only current portion, same as BS
balance, but for the balances incurred interest, should be
calculated based on the latest interest rate.
If there is derivatives, it should be disclosed.

Need to check tie up with Cash flow statements;

- balance of other payable for purchase property,plant
and equipment
- movement of loan, lease

Typical examples are as follows:

- capital increase after the year end
- additional/renew loan agreement
- changing director/commissioner
- receive the result of tax audit
- new branch establishment/changin office address
- new agreement which has significant impact to the
company's financial condition
Date
Content of audit report Audit items

Statement of financial position Disclosure

Statement of profit or loss and

other comprehensive income Disclosure

Change of capital Disclosure

Cash flow statement Disclosure
Cash flow statement Disclosure

Cash flow statement Disclosure:Non-cash acti

Disclosure:Foreign
Cash flow statement exchange
Disclosure:Changes in
Cash flow statement working capital

Disclosure: Income tax

Cash flow statement paid
 Disclosure: Interest
Cash flow statement paid

Cash flow statement Disclosure

Disclosure:Lease
Cash flow statement payment
Disclosure:Effect of
foreign exchange in
Cash flow statement cash in banks

1. General Disclosure
Disclosure:Completion
1. General date
2. Summary of significant
accounting policy Disclosure: General

Disclosure:
Classification
2. Summary of significant Financial assets and
accounting policy liabilities
2. Summary of significant Disclosure: Accounting
accounting policy policies
2. Summary of significant
accounting policy Disclosure: Inventory
2. Summary of significant Disclosure: Property,
accounting policy plant and equipment
Disclosure: Intangible
Intangible Assets Assets
2. Summary of significant Disclosure: Foreign
accounting policy currency transactions

2. Summary of significant Disclosure: Foreign

accounting policy currency transactions
3. Critical accounting
judgements and key sources of Disclosure: Foreign
estimation uncertainty currency transactions

Disclosure: Cash on
Cash on hand and in banks hand and in banks

Trade receivables,Other
receivables Disclosure

Trade receivables,Other
receivables Disclosure

Inventories Disclosure

Inventories Disclosure

Advances Disclosure

Prepaid expenses Disclosure

Property, plant and
equipment/Intangible assets Disclosure

Property, plant and

equipment/Intangible assets Disclosure

Trade payables/other payables Disclosure

Trade payables/other payables Disclosure

Accrued expenses Disclosure

Accrued expenses Disclosure

Advance from customers Disclosure

Loans Disclosure

Loans Disclosure

Lease payables Disclosure

Lease payables Disclosure

Employee benefits Disclosure

Employee benefits Disclosure

Derivatives Disclosure

Derivatives Disclosure

Capital Disclosure

Capital Disclosure
Sales Disclosure

COGS Disclosure

COGS Disclosure

COGS Disclosure

Operating expenses Disclosure

Operating expenses Disclosure

Operating expenses Disclosure

Related party transactions Disclosure

Finance risk management
objective and policies Disclosure:Credit risk

Finance risk management
objective and policies
Finance risk management
objective and policies
Disclosure: Market
risk-foreign exchange
currency risk
Disclosure: Market
risk- interest rate risk

Finance risk management

objective and policies Disclosure
Finance risk management Disclosure: Capital
objective and policies management

Monetary assets and liabilities

denominated in foreign
currencies Disclosure

Financial instruments Disclosure

Supplemental disclosure on non

cash activities Disclosure

Subsequent events Disclosure

Points to be checked checked by Date ref WP reviewed by
footing, tie up with related Notes (note’s number and its
figure).

footing, tie up with related Notes (note’s number and its

figure).

footing, tie up with related Notes (note’s number and its

figure).
Tie up with BS and PL.
Prepare Cash Flow worksheet (Indirect method).

CASH FLOWS FROM OPERATING ACTIVITIES

PL accounts of non-cash activities should be tied up with
PL and the related Notes (note’s number and its figure)
such as:
-depreciation and amortization (tie up with Notes of
Property, plant and equipment, Intangible assets, COGS
and Operating expense)
-employee benefit expense (tie up with Notes of
Employee benefits, COGS, Operating expense)
-gain/loss of Property, plant and equipment sales (tie up
with Note of Property, plant and equipment)
- loss/gain from write-off BS accounts (tie up with Note of
the related accounts)
- any other provision accounts , if any (tie up with Note of
the related accounts)

Foreign exchange in operating activities should consist of:

- forex gain/loss from revaluation of cash in hand and in
banks in foreign currencies.
- forex gain /loss from revaluation of monetary
assets/liabilities classified to investment/financial
activities(e.g. loan)
Changes in working capital consist of mutation of BS
account, but the items below should be adjusted:

Income tax paid should be:

+)Beginning balance of Tax payable PPh25/29 for
corporate income tax
+)Current income tax in PL
-)Ending balance of tax payable PPh25/29 for corporate
income tax
Interest paid should be:
+)Accrued Interest-beginning balance
-)prepaid interest beginning balance
+)Interest expenses in PL
-)Accrued interest ending balance
+)Prepaid interest ending balance

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property and equipment should be:
+)Addition from Note of Property and Equipment
+)Beginning balance of other payable for property and
equipment purchase
-)Ending balance of other payable for property and
equipment purchase
The balance of other payable for Property and
equipment purchase should be disclosed as
supplemental information of non cash activities in the
title of “Significant non-cash investing activities”, if the
amount is significant.

CASH FLOWS FROM FINANCING ACTIVITIES

'Lease payment should be:
+)Beginning balance of lease payable
+)Addition from lease
+)Movement from revaluation of foreign exchange
+)Reclassification(if any)
-)Ending lease payable
This should be disclosed as supplemental information of
non cash activities in the title of “Significant non-cash
investing activities”
"Effect of foreign exchange in cash in banks" should be
forex gain/loss from revaluation of cash in hands and
banks in foregn currencies.

Description in "General", including information of BOD

and BOC should be confirmed with the latest Akta and
approval from the ministry of law and human rights.

Completion date should be the date of audit opinion.

Follow the latest guide report (including New Accounting
Standards)

Check consistency between the presented account names

and Note of “Financial risk management”

Check WP if the presented accounting policies are tied up

with each account in BS and PL
Check WP if the presented evaluation method (FIFO or
Average) is appropriate.

Check WP if the useful lives are selected appropriately.

Check WP if the useful lives are selected appropriately.

Check if exchange rates are tied up with BI middle rate at
year- end.

Check if exchange rates are consistent with Note of

Foreign exchange currency risk and Monetary assets and
liabilities denominated in foreign currencies.

Check consistency with the related notes (note’s number

and those figures).

Need to check if the balance is tied up with the related

notes like below:
- Financial risk management objective and policies - Credit
risk
- Monetary assets and liabilities denominated in foreign
currencies
- Financial instruments

In Note of report, information listed below should be

disclosed:
-breakdown of AR, OR per customer(listed from highest to
lowest)
-summary of Aging
-balance per currency
-provision for doubtful AR(If any)

Check to tie up with the elated notes such as the

following:
- Related party transactions
- Financial risk management objective and policies - Credit
risk
- Monetary assets and liabilities denominated in foreign
currencies
- Financial instruments

In Note of report, information listed below should be

disclosed:
-breakdown per type of inventories
-condition of insurance for inventories (if any)
-inventories for collateral security (if any)

Check to tie up with related notes such as the following:

- COGS (beginning balance, ending balance)

If the balance is above materiality, below information

should be disclosed in Note:
- breakdown of account per type or company(listed from
highest to lowest)

If the balance is above materiality, below information

should be disclosed in Note:
- breakdown of account per type or company (listed from
highest to lowest)
- current, non-current portion
amortization should be tied up with Notes of COGS and
Operating expenses
Information listed below should be disclosed in Note;
- Beginning/addition/disposal/reclassification/Ending
Cost/Accumulated depreciation
- depreciation in COGS and operating expense
- Disposal of Property , plan and equipment
Cost: XXX-1
Accumulated depreciation: -XXX-2
Book value: XXX-3=1-2
Sales Price: XXX-4
Gain/loss of disposal XXX-5=4-3
- Condition of insurance, collateral

Check to tie up with related Notes such as the following:

-Cash flow statement (depreciation, acquisition property
and equipment, proceed from sales of property and
equipment)
- COGS, operating expenses (depreciation and
amortization)

In note of report, information listed below should be

disclosed:
-breakdown of AP, OP per supplier/vender (listed from
highest to lowest)
-summary of Aging
-balance per currency

Check to tie up with related Notes such as the following:

- Related parties transactions
- Financial risk management objective and policies -
liquidity risk (repayment schedule)
- Monetary assets and liabilities denominated in foreign
currencies
- Financial instruments

If the balance is above materiality, below information

should be disclosed in note:
- breakdown of account per type or company (listed from
highest to lowest)

Check to tie up with related Notes such as the following:

- Related parties transactions
- Financial risk management objective and policies -
liquidity risk (repayment schedule)
- Monetary assets and liabilities denominated in foreign
currencies
- Financial instruments
If the balance is above materiality, information below
should be disclosed in note:
- breakdown of account per type or company
Information below should be disclosed in Note:
- the details of loan balance per bank/related parties and
per current/non-current portion
- summary of loan agreements (date of agreement,
bank/related party name, amount of principal, interest
rate, maturity date, balance as of the end of the year in
original currency and IDR equivalent..

Check to tie up with related Notes such as the following:

- Cash flow statement
- supplement information about non-cash flow activities
- Related parties transactions
- Financial risk management objective and policies -
liquidity risk (repayment schedule)
- Monetary assets and liabilities denominated in foreign
currencies
- Financial instruments

Need to summarize information like below;

- interest rate
- interest expense
- repayment schedule based on undiscounted amount
- current/non-current classification

Check to tie up with related notes such as the following:

- Cash flow statement
- supplement information about non-cash flow activities
- Financial risk management objective and policies -
liquidity risk (repayment schedule)
- Monetary assets and liabilities denominated in foreign
currencies(if any lease in foreign currency)
- Financial instruments
Note of employee benefits should be based on the
actuarial report.

Check to tie up with the related notes such as the

following:
- Cash flow statement(employee benefit expense/benefit
paid)
- Taxation (deferred tax asset)
Note of delivertives should be based on the report issued
by the banks.

Check to tie up with related notes such as the following:

- Financial instruments

Composition of shareholders should be disclosed as Note

Check to tie up with related notes such as the following:

- Cashflow(if any capital increase
- Financial risk management objective and policies -
capital management
If there if any sales to related parties, it should be
disclosed in Note of related party transactions notes

For mapping for disclosure, need to consider;

- comparability of account with the previous year
- similar nature of account should be integrated(e.g.
salary, and other allowance should be integrated as
"Salary and allowances")
If any purchase from rthe elated parties, it should be
disclosed in Note of related party transactions

Check to tie up with related notes such as the following:

- Inventory (the beginning & ending balance of inventory)
- property, plant and equipment, intangible assets
(depreciation and amortization)
- employee benefits (employee benefit expense)
- Cash flow statements (depreciation and amortization,
employee benefit expense)
- related partytransactions

For mapping for disclosure, we need to consider;

- comparability with the previous year
- similar nature of account should be integrated(e.g.
salary, and other allowance should be integrated as
"Salary and allowances")
If any expense (e.g. management fee/technical assistance
fee etc.) from the related parties, it should be disclosed in
note of related party transactions

Check to tie up with the related notes such as the

following:
- property, plant and equipment, intangible assets
(depreciation and amortization)
- employee benefit (employee benefit expense)
- Cash flow statements (depreciation and amortization,
employee benefit expense)
- related party transactions

Check the structure of related parties and disclose

information of the nature of the related parties:
* ultimate parent
* direct parent (investment majority of the company's
shares directly)
* entity under common control (entity under the
ultimate parent)
* shareholder (investment to the company but not
majority)
* affiliate (entity which the company invests but not
majority)
* subsidiary (entity which the company invest majority
of shares)
Check if Note should be tied up with other notes of
financial assets (Cash, AR,OR, deposit etc.)
Check if the note is tied up with Manetary assets and
liabilities, Note 2(foreign exchange rate)

Check if the note is tie up with notes of loan and lease

Disclosure of payment schedule based on undiscounted

amount, we need to check the following items:
-AP,OP: need to follow the payment schedule based on
the aging list
- Accrued expense: depends on the nature of accrued
expenses (e.g. salary: less than 3 months, interest:
depends on the repayment schedule)
- loan and lease payable: the amount of interest payment
should be included in repayment schedule.

Should be tied up with Equity in BS

Should be tied up with related notes:

- balance in original currency
- balance in functional currency
- exchange rate

Should be tie up with related Notes:

- CV: tie up with BS balance and related Notes
- FV: if the balance is only current portion, same as BS
balance, but for the balances incurred interest, should be
calculated based on the latest interest rate.
If there is derivatives, it should be disclosed.

Need to check tie up with Cash flow statements;

- balance of other payable for purchase property,plant
and equipment
- movement of loan, lease

Typical examples are as follows:

- capital increase after the year end
- additional/renew loan agreement
- changing director/commissioner
- receive the result of tax audit
- new branch establishment/changin office address
- new agreement which has significant impact to the
company's financial condition
Date
Content of report Content of audit report item

Beginning balance
Cash in hand and bank Cash on hand and in banks check

Cash on hand and in banks

Cash in hand and bank Cash on hand and in banks cash in hand

Cash in hand and bank Cash on hand and in banks cash in bank

Foreign currency
Cash in hand and bank Cash on hand and in banks transaction
Trade receivable,Other Trade receivables,Other Beginning balance
receivables receivables check

Trade receivables,Other
receivables

Trade receivable,Other Trade receivables,Other

receivables receivables confirmation

Trade receivable,Other Trade receivables,Other

receivables receivables Aging
Trade receivable,Other Trade receivables,Other
receivables receivables classification

Trade receivable,Other Trade receivables,Other

receivables receivables forex revaluation
Trade receivable,Other Trade receivables,Other related parties
receivables receivables transactions
Beginning balance
Inventory Inventories check

Inventories

Inventory Inventories stocktaking

Inventory Inventories stocktaking

Inventory Inventories stocktaking

Inventory Inventories evaluation

Inventory Inventories Cut off

Inventory Inventories vouching

Inventory Inventories evaluation

Inventory Inventories evaluation

Inventory Inventories evaluation

Inventory Inventories evaluation

Beginning balance
Advance Advances check

Advance Advances Vouching

Advance Advances classification

Advance Advances evaluation

Beginning balance
Prepaid expense Prepaid expenses check

Prepaid expenses

Prepaid expense Prepaid expenses Vouching

Prepaid expense Prepaid expenses classification

Prepaid expense Prepaid expenses classification

Prepaid expense Prepaid expenses evaluation

Prepaid expense Prepaid expenses evaluation

Property and Property, plant and Beginning balance
Equipment/Intangible assets equipment/Intangible assets check

Property and Property, plant and

Equipment/Intangible assets equipment/Intangible assets Existensy

Property and Property, plant and

Equipment/Intangible assets equipment/Intangible assets vouching

Property and Property, plant and

Equipment/Intangible assets equipment/Intangible assets cut off

Property and Property, plant and

Equipment/Intangible assets equipment/Intangible assets evaluation

Property and Property, plant and

Equipment/Intangible assets equipment/Intangible assets classification

Property and Property, plant and

Equipment/Intangible assets equipment/Intangible assets classification
Beginning balance
Trade payable/other payable Trade payables/other payables check

Trade payables/other payables

Trade payable/other payable Trade payables/other payables confirmation

Trade payable/other payable Trade payables/other payables payment schedule

Unrecorded liabilities
Trade payable/other payable Trade payables/other payables check

Trade payable/other payable Trade payables/other payables classification

Trade payable/other payable Trade payables/other payables forex revaluation

related parties
Trade payable/other payable Trade payables/other payables transactions
Beginning balance
Accrued expense Accrued expenses check

Accrued expense Accrued expenses analysis

Accrued expense Accrued expenses vouching

Accrued expense Accrued expenses evaluation

Accrued expense Accrued expenses evaluation

 Beginning balance
Advance from customers Advances from customers check

Advance from customers Advances from customers Vouching

Advance from customers Advances from customers evaluation

Advance from customers Advances from customers classification

Beginning balance
Loan Loans check

Loan Loans analysis

Loan Loans Existensy and accuracy

Loan Loans confirmation

Loan Loans evaluation

Loan Loans classification

Loan Loans subsequent event

Beginning balance
Lease payable Lease payables check
 accuracy and
Lease payable Lease payables assessment
Lease payable Lease payables Calculation accuracy

Beginning balance
Taxation Taxation check

Taxation Taxation Existensy and accuracy

Taxation Taxation Existensy and accuracy

Taxation Taxation CIT calculation

Taxation Taxation Deferred tax

Taxation Taxation Loss carry forward

Taxation Taxation Claim for tax refund

Taxation Taxation Tax audit
Beginning balance
Employee benefit Employee benefits check

Employee benefit Employee benefits assessment

Employee benefit Employee benefits actuarial report

Delivertives Derivatives Existence

Beginning balance
Capital Capital check

Capital Capital accuracy

Capital Capital existence

Capital Capital classification

Sales Sales analysis

Sales Sales accuracy and existence

Sales Sales cut off

Sales Sales classification

COGS COGS analysis

COGS COGS accuracy and existence

COGS COGS classification

Operating expenses Operating expenses analysis

Operating expenses Operating expenses classification

Other income/expense Other income/expense analysis

Other income/expense Other income/expense Classification

Other income/expense Other income/expense Accuracy and existence

Related parties transactions Related party transactions accuracy and existence

Audit items check points

1.Beginning balance check if beginning balance in GL is the same as the balance

check in last year audit report.

2 Analytical
Procedures

check the balance of petty cash with the result of cash

count at the year end. If the date of cash count is after the
3.Cash on hand- cash year end, check the movement of petty cash from the year
opnam check end until the date of cash count.

send confirmation letters to all bank and check the balance

in book with answer of confirmation. If there is any
difference between balance in book and confirmation
4Cash in banks- answer, check the reason and prepare the bank
confirmation reconciliation.

for account in foreign currency, check if the balance in IDR

is revaluated by year end exchange rate. Amounts listed
below should be mentioned in WP;
-Balance by original currency
-Exchange rate
-Balance by IDR
5.Foreign currency -Balance in book
transactions -Difference(if any)
1Beginning balance check if beginning balance in GL is the same as the balance
check in last year audit report.

2 Analytical
Procedures

obtain detail of AR and OR and select customers which

confirmation letters should be sent. Basically selection
basis should be like below;
((Total balance of AR and OR)-(total balance which subject
3 Confirmation to confirmation letter))<Materiality

obtain Aging list and check the accuracy of aging

information in sampling basis.
Need confirm collectibility if there is any long
outstanding(more than 3 months) AR,OR.
If the date of collection determined by the
invoice/agreement is more than 1 year, it should be
reclassified to non-current assets.
4 Aging Prepare the summary of aging for disclosure.
 check if the classification to AR and OP is correct.
AR: receivable from sales transaction
OR: receivables from other transaction than sales
5Classification Need to check the nature of transactions related to OR

If there is balance in foreign currency, check the calculation

of revaluation based on the year end exchange rate:
- balance in original currency
- exchange rate
- balance in IDR after exchange
6 Foreign currency - balance in book
revaluation - difference (if any)
7 Related party If there is any balance to related parties, those balance
transactions should be separated.
1Beginning balance check if beginning balance in GL is the same as the balance
check in last year audit report.

2Analytical Procedures

attend the stocktaking held by the company at the year

end. If the date of stocktaking is after the year end, the
movement of inventory from the year end until stocktaking
3.Stocktaking date should be checked with supporting documents

if there is any difference between quantity in book and

actual quantity based on stocktaking, need to obtain the
reconciliation of stocktaking prepared by the client and
3.Stocktaking consider if it should be made adjustment.

if the company outsources other company to manage the

inventory, or inventory is stored by other company(e.g.
already delivered to customer, but sales not yet
recognized), should consider if confirmation letter to the
3.Stocktaking outsourced company is necessary.

if inventory like below, need to obtain supporting

documents;
- goods in transit: shipment date should be before the year
end
- goods delivered to customer, but sales not yet
3.Stocktaking recognized: delivery date and sales date(after year end)

3.Stocktaking/Cut off check transactions near year end

4.Existence sample test of purchase transactions

5.Cost check if the unit price of inventory is calculated based on

formulas(methods) the evaluation method determined by the company (e.g.
ISA2 23-25/PSAK14 FIFO, average method)

For manufacturing company, obtain supporting documents

6.Cost accounting how to calculate the value of finished goods/work in
progress.

check the mutation compare to the last year per item. If

there is any slow moving/no moving item, confirm with the
company about possibility of use. If there is no possibility
7.Net realizable value of use, consider to recognize obsolescence loss
check the unit price of finished goods/work in process is
lower than net realizable value(NRV=sales price - sales
7.Net realizable value expenses).
Beginning balance check if beginning balance in GL is the same as the balance
check in last year audit report.

Existence -Vouching obtain supporting documents and check when advance is

purchase payments collectible (reclassified to inventory or other account).

check the nature of each advance.

- advance payment for purchase inventory
- advane payment for purcahse property and equipment
should be reclassifed to construction in progress
- advance payment to employee: need to check the
Classification internal rule of settlement

check if there is long outstanding balance. If there is no

Valuation collectibility, it should be reclassified to expesne.
Beginning balance check if beginning balance in GL is the same as the balance
check in last year audit report.

2Analytical Procedures

obtain detail of prepaid expense prepared by the client and

Existence -Vouching to supporting documents(agreement, invoices) and check the
gather information amount, payment schedule, term of contract.
 if the contract term is more than 1 year, portion for more
Classification than 1 year should be reclassified to non-current assets.
if any lease agreement subject to PSAK73, it should be
Classification reclassified to Rights-of-use assets.
Valuation and check the calculation of amortization is appropriate based
allocation on the agreement(contract term)
Valuation and check if there is any contract which has been already
allocation expired/canceled.
Beginning balance check if beginning balance in GL is the same as the balance
check in last year audit report.

Existense-physical check the physcal existence and condition of assets at the

verification year end(same as stocktaking) or during the field work

sample test of purchase new assets and disposal assets.

Check points;
- date of start using(start depreciation)
- cost
Vouching -useful life

check the condition of Construction in progress when CIP

Cut off can be reclassified to other assets and start depreciation.

check the calculation of depreciation

- depreciation should be started from the month of
acquisition
- depreciation for disposal asset should be terminated at
Depreciation the month of disposal

lease agreement (office, warehouse, rental car etc) should

be considered if contract should be subject to PSAK73.
check point is;
- lease term
- early cancelation penalty
Classification -total amount of lease payment
Property and equipment for the purpose of non-operating
(e.g. for rental income), it should be reclassified to
Classification Investment property.
Beginning balance check if beginning balance in GL is the same as the balance
check in last year audit report.

Analytical Procedures

obtain detail of AP and OP and select customers which

confirmation letters should be sent. Basically selection
basis should be like below;
((Total balance of AP and OP)-(total balance which subject
Confirmation to confirmation letter))<Materiality
 Obtain aging list of AP and OP and check the payent
schedule and if there is any payable which the due date
has been passed. If the date of payment determined by the
invoice/agreement is more than 1 year, it should be
reclassified to non-current liabilities.
Prepare the summary of aging and repayment for
Payment schedule disclosure.

check invoices received by the company after the year end

until the audit field work if there is any purchase/expense
Unrecorded liabilities which should be recognized in the fiscal year but not
check recognized yet.

check if the classification to AP and OP is correct.

AP: payable for purchase inventory/COGS transaction
OP: payables from other transaction than purchase/COGS
Need to check the nature of transactions related to OP
If OP is related to purchase property and
equipment/intangible assets, those OP should be adjusted
Classification for investment cash flow activities.

If there is balance in foreign currency, check the calculation

of revaluation based on the year end exchange rate:
- balance in original currency
- exchange rate
- balance in IDR after exchange
Foreign currency - balance in book
revaluation - difference (if any)
Related party If there is any balance to related parties, those balance
transactions should be separated.
Beginning balance check if beginning balance in GL is the same as the balance
check in last year audit report.

Compare to the last year balance, check if there is any

additiona accrued expense should be recognized. Typical
accrued expense is;
- accrued salary
- accrued professional fee
- accrued interst
Analytical Procedures - accrued bonus
check agreements/invoices if there is any additional
vouching accrued expense should be recognized

Unrecorded liabilities
check check if calculation by the client is correct
check the revaluation if there is accrued expense in foreign
Valuation currency.
Beginning balance check if beginning balance in GL is the same as the balance
check in last year audit report.

obtain supporting documents and check when advance will

Vouching realize (reclassified to sales or other account).

Valuation and check if there is long outstanding balance. If any, check the
allocation reason and consider to make adjustment

check the nature of each advance.

- advance received from customer
Classification - advane received from non customer-check the nature
Beginning balance check if beginning balance in GL is the same as the balance
check in last year audit report.

Analytical Procedures

check all existing loan agreement with the list of loan

prepared by the client. Check points;
- date of agreement
- bank/related party name
- principal amount
- interest rate
Existence and - maturity date
accuracy - repayment schedule

send confirmation letters to all bank and related parties.

Then check the balance in book with confirmation relies
Confirmation and reconcile the difference if any difference.

If loan in foreign currency, it should be revaluated based

on the exchange rate at the year end.
- balance in original currency
- exchange rate at the year end
- balance in IDR
- balance in book
- difference(if any)
forex gain/loss from revaluation should be disclosed as
Valuation non-cash flow movement
if maturity date is more than 1 year aftere the year end,
the amount paid after 1 year periode should be reclassified
Classification to non-current liabilities.
If the maturity date is coming within 3 months after the
year end or before the opinion date, check if the
Subsequent events agreement has been renewed.
Beginning balance check if beginning balance in GL is the same as the balance
check in last year audit report.
 check all leasing agreement and prepare the summary
including information such as;
- name of lessor
- date of agreement
- rent per month
- payment schedule
- lease term
Accuracy and - condition of early cancelation
assessment then, assess if leasing agreement is subject to PSAK 73
Calculation accuracy check the calculation sheet prepared by the client

check if beginning balance in GL is the same as the balance

in last year audit report.
-Prepaid tax
- Claim for tax refund
- Deferred tax assets
Beginning balance - Tax payable
check - Deferred tax liabilities

check the supporting documents with the balance and if

any difference between balance in book and payment
evidence(prepaid tax)/SPT(payable), need to reconcile.
Especially;
- Prepaid PPh22: cannot be credited if there is no
supporting documents(PIB, )
- Prepaid PPh23: cannot be credited if there is no
supporting documetns(Bukti Potong)
- Prepaid PPh21: *overpayment PPh21 cannot carry
forward to next fiscal year
* PPh21 should be consistent with pay roll calculation by
the company.
- VAT IN/VAT OUT: typical reason of difference between
book and SPT;
Existense and * timing difference
accuracy * cancelation/amendment of faktur pajak

If there is any transaction like below with companies out of

Indonesia, it is possible to be subject to PPh26.
- interest payment
- dividends payment
- technical assistant fee/management fee/other consulting
fee payment
In this case, need to check;
- if the company has the certificate of domicile(COD) issued
by the tax office which the counterpart is located(if the
counterpart is located in Japan, COD issed by tax office in
Existense and Japan should be obtained)
accuracy
 check points of CIT calculation provided by the company:
-typical temporary difference
*(employee benefit expense)-(Employee benefit paid)
*depreciation due to difference of useful life between
commercial and fiscal
*provision of bad debt, bonus etc.
-typical permanent difference
*benefit in kind (apartment for expats, income tax paid
for expats, travel expense for non business related, HP
expenses, rental car expense,welfare expense etc)
*tax penalty
*Donation
CIT calculation -tax payable PPh29 = (taxable income)-(Prepaid 22,23,25)

check the calculation of deferred tax. Check points ;

- deferred tax is consistency with temporary difference
- balance of deferred tax assets/liabilities are tie up with
(Difference of book value between in commercial and
fiscal)x (applicable CIT rate)
- applicable tax rate should be considered when the
temporary difference will be realized(e.g. if the temporary
difference plans to realize in FY2021, the tax rate for DTA
calculation should be 22%. if the temporary difference
plans to realize after FY2022, the tax rate for DTA should
Deferred tax be 20%)

If the company has loss carry forward, need check:

- loss carry forward will expire in 5 years, so it should be
considered if the company can make taxable income within
5 years
- loss carry forward can be subject to deferred tax assets if
loss carry forward can be offset with taxable income within
5 years.
- it is possible that the amount of loss carry forward is
amended/written off as a result of tax audit. so need to pay
Loss carry forward attention if the company takes tax audit or not.

-If there is overpayment of corporate income tax after CIT

calculation, need to confirm if the company would like to
claim tax refund or not. If not, prepaid PPh22, 23 and 25
should be reclassified to expense.
-If there is outstanding claim for tax refund from previous
year, need to check the condition of tax audit and
Claim for tax refund collectibility of tax refund.
 Ask the client if the company takes tax audit during the
fiscal year or not. If the tax audit is already finished during
the audit, the impact from tax audit should be adjusted.
- penalty charged as a result of tax audit
- additional CIT charge as result of tax audit
- correction of loss carry forward
Tax audit - reduction tax refund
Beginning balance check if beginning balance in GL is the same as the balance
check in last year audit report.

if the impact of employee benefit is material, employee

benefit should be recognized based on PSAK 24 and the
Assessment certified actuary's report.

check the actuarial report prepared by the actuary, check

points;
- beginning balance of employee benefit is correct or not
- number of employee is correct or not
- discount rate is appropriate or not
- benefit paid is based on the actual payment by the
company or not
- plan asset is based on the report provided by the
insurance company(if any)
- actuarial gain/loss is rational considering movement of
discount rate/salary increase or other assumptions.
- if there is other long term benefit, need to check if the
company has other special employee benefit program and
need to confirm with the actuary why other long term
Actuarial report benefit is recognized.

-Need to confirm with the client if there is any additional

agreement with banks and financial institutions such as
forward contracts, swap contracts or any other
delivertives. If any, accounting treatment should follow the
accounting standard regarding financial instruments.
- Need to check bank confirmation carefully if there is any
Existence contract other than loan and saving/current account.
check if beginning balance in GL is the same as the balance
Beginning balance in last year audit report(Especially for the balance of
check retained earnings)

check the composition of shareholders with the latest Akta

Accuracy and approval from the ministry of law and human rights.
if any capital increase, check if the capital increase has
been already authorized by the Akta and approval from the
Existence ministry of law and human rights.
 If any capital increase in foreign currency, the amount
recognized as Capital should be the amount based on the
Akta, and the difference with actual received from
shareholders should be recognized as additional paid in
Classification capital.
compare with the amount of sales previous year and
Analytical Procedures analize the reason of mutation

obtain the supporting documents of sales and check with

the accuracy of sales;
- invoices (amount of sales and customer)
Accuracy and - delivery note (timing of sales recognition)
existence - cash receipt (collectibility of receivables)
check the sales transactions near the year end if sales is
Cut off recognized correctly

If any sales of non-operating assets like below, it should be

reclassified to proper account;
- sales of fixed assets-other income
- sales of scrap or waste-other income
- rental income-other income
Classification - discount of purchase-offset with purchase
compare with the amount of each account of COGS
Analytical Procedures previous year and analize the reason of mutation
Accuracy and check if the inventory is reclassified to COGS when related
existence sales is recognized correctly.

check the accuracy of classification items of expenses to

COGS or operating expenses ;
- depreciation(depreciation from assets for manufacturing
should be COGS etc)
- salary and other labor cost (can be separated based on
departments)
Classification - other overhead cost(based on department)

compare with the amount of each account of operating

Analytical Procedures expenses previous year and analize the reason of mutation

check the accuracy of classification items of expenses to

operating expenses or operating expenses ;
- depreciation(depreciation from assets for indirect
department(accounting etc.) should be operating expense
etc.)
- salary and other labor cost (can be separated based on
departments)
Classification - other overhead cost(based on department)
compare with the amount of each account of other
income/expense previous year and analize the reason of
Analytical Procedures mutation
 generally, items classified to other income/expense is like
below;
- financial income/expense (interest income/expense)
- foreign exchange gain or loss
- gain/loss from fixed asset disposal/sales
- income from non-operating sales
- other expense which are not classified to COGS or
operating expense
Classification - other income/expense which is not material
If any income/expense which amount is material and extra
Accuracy and ordinally, need to check the supporting documents and the
existence nature of transaction.

need to reconcile the amount of related parties

transactions with;
- receivables/payables based on the aging list
- sales/purchase/expense based on GL
- confirmation letter replies from all related party
Accuracy and - management confirmation about related parties
existence transactions
Points to be checked checked by Date ref WP reviewed by

Check if the beginning balance in GL is the same as the

balance in last year's audit report.

Compare to the last year's balance per account/currency,

check if there is any additional account to exist.

Check the balance of petty cash with the result of cash

count at the year end. If the date of cash count is after the
year end, check the movement of petty cash from the
year end until the date of cash count.

Send confirmation letters to all bank and check the

balance in book with answer of confirmation. If there is
any difference between balance in book and confirmation
answer, check the reason and prepare the bank
reconciliation.

For account in foreign currencies, check if the balance in

IDR is revaluated by year end exchange rate. Amounts
listed below should be mentioned in WP
-Balance by original currency
-Exchange rate
-Balance by IDR
-Balance in book
-Difference(if any)
Check if the beginning balance in GL is the same as the
balance in last year's audit report.
Compare to the last year's balance per customer
and check the reason when identified fluctuation is a
significant amout.

Obtain the details of AR and OR and select customers

which confirmation letters should be sent. Basically
selection basis should be like below:
((Total balance of AR and OR)-(total balance which subject
to confirmation letter))<Materiality

1.Obtain Aging list and check the accuracy of the aging

information on a sample basis.
2.Need confirm collectability if there is any long
outstanding(more than 3 months) about AR,OR.
3.If the date of collection determined by the
invoice/agreement is more than 1 year, it should be
reclassified to non-current assets.
4.Prepare the summary of aging for disclosure.
1.Check if the classification to AR and OP is correct.
AR: receivable from sales transactions
OR: receivables from other than sales transactions
2.Need to check the nature of transactions related to OR

If there is balance in foreign currency, check the

calculation of revaluation based on the exchange rate at
the end of the year:
- balance in original currency
- exchange rate
- balance in IDR after exchange
- balance in book
- difference (if any)
If there is any balance to related parties, the balance
should be separated from AR/OR for disclosure.
Check if the beginning balance in GL is the same as the
balance in the last year 's audit report.

Compare to the last year's balance per type of inventories

and check the reason when identified fluctuation is a
significant amout.

1.Attend the stocktaking held by the company at the year

end.
2.If the date of stocktaking is after the year end, the
movement of inventory from the year end until the
stocktaking date should be checked with the supporting
documents.

3.If there is any difference between a quantity in book

and the actual quantity based on stocktaking, need to
obtain the reconciliation of stocktaking prepared by the
client and consider if it should be made adjustment.

4.If the company outsources other companies to manage

inventories, or some inventories are stored by other
companies(e.g. already delivered to a customer, but sales
was not yet recognized), should consider if it is necessary
to send confirmation letters to the outsourcing company .

5.If inventories like below, need to obtain supporting

documents:
- goods in transit: shipment date should be before the
year end
- goods delivered to customer, but sales not yet
recognized: delivery date and sales date(after year end)

6.Check transactions near the end of the year if

transactions have been recorded in the correct
accounting
period
vouching costs of purchase transactions on a sumple
basis.

Check if the unit price of inventory is calculated based on

what kind of cost formula. The cost of inventories, other
than using specific identification method of their
individual costs, should be assigned by using the first‑in,
first‑out (FIFO) or weighted average cost
formula(method).

For manufacturing companies, obtain supporting

documents how to calculate the cost of finished
goods/work in progress. For those companies, check the
result of calculation (allocation) of conversion costs to
FG,WIP and COGS.

1.Check the mutation of items comparing to the last

year's data. If there is any slow moving/no moving item,
confirm with the company about possibility of sale or use.
If there is no possibility , consider recognizing its
obsolescence loss
2.Check the unit price of finished goods/work in process is
lower than net realizable value(NRV=sales price - sales
expenses).
Check if the beginning balance in GL is the same as the
balance in the last year's audit report.

Obtain supporting documents and check the content of

each payment and check when each balance of advance
payments is settled(reclassified to inventory or other
account)

check the nature of each advance.

- advance payments for purchase inventory
- advance payments for purchase property and equipment
should be reclassified to construction in progress
- advance payments to employee: need to check the
internal rule of settlement
Check if there is long outstanding balance, confirm the
reason and determine if the balance should be reclassified
to CoGS/expense.
Check if the beginning balance in GL is the same as the
balance in the last year's audit report.

Compare to the last year's balance per type or company

and check the reason when identified fluctuation is a
significant amout.

Obtain the details of prepaid expenses prepared by the

client and the supporting documents(agreements,
invoices) and check the amount, payment schedule, term
of contract.
If the contract term is more than 1 year, portion for more
than 1 year should be classified to non-current assets.
If any lease agreement subject to PSAK73, it should be
classified to Rights-of-use assets.
Check the calculation of amortization is appropriate,
based on the agreements(e.g. a term of contract)
Check if there is any contract which has been already
expired/canceled.
Check if the beginning balance in GL is the same as the
balance in the last year's audit report.
Check the physical existence and condition of assets at
the year end(same as stocktaking) or during the field
work.

Check newly built,purchased assets and disposal assets on

a sample basis. Consider the following points:
- date of start using(start depreciation)
- cost
-useful life

Check the condition of Construction in progress when CIP

can be reclassified to other assets and started
depreciation. Depreciation of an asset begins when it is
available for use(PSAK16. 55)

Check the calculation of depreciation

- depreciation should be started from the month of
acquisition
- depreciation for disposal asset should be terminated at
the month of disposal

lease agreements (office, warehouse, rental car etc.)

should be considered if those contracts should be subject
to PSAK73. Check items are:
- lease term
- early cancelation penalty
-total amount of lease payment
If Property, plant and equipment is for the purpose of
non-operating (e.g. for rental income), it should be
reclassified to Investment property.
Check if the beginning balance in GL is the same as the
balance in the last year's audit report.

Compare to the last year's balance per type or company

and check the reason when identified fluctuation is a
significant amout.

Obtain the details of AP and OP and select customers

which confirmation letters should be sent. Basically, basis
of selection should be like below:
(Total balance of AP and OP)-(total balance which is
subject to confirmation letter))<Materiality
1.Obtain Aging list of AP and OP and check the payment
schedule and if there is any payable which the due date
has been passed or not. If the date of payment
determined by the invoice/agreement is more than 1
year, it should be classified to non-current liabilities.
2.Prepare the summary of aging for disclosure.

Check invoices received by the company from the year

end to the audit field work. If there is any
purchase/expense which should be recognized in the
fiscal year but those are not recognized yet, determine
PAJE considering materiality.

1.Check if the classification to AP and OP is correct.

AP: payables for purchases of inventories /COGS
transactions
OP: payables from other than purchases /COGS
transactions
2.Need to check the nature of transactions related to OP.
If OP is related to purchases of property, plan and
equipment/intangible assets, those OP should be adjusted
for Investment cash flow activities.

If there is balance in foreign currencyies, check the

calculation of revaluation based on the exchange rate at
the end of the year:
- balance in original currency
- exchange rate
- balance in IDR after exchange
- balance in book
- difference (if any)
If there is any balance to related parties, those balance
should be separated for disclosure.
Check if the beginning balance in GL is the same as the
balance in the last year's audit report.

Compare to the last year's balance, check if there is any

additional accrued expense should be recognized. Typical
accrued expense is:
- accrued salary
- accrued professional fee
- accrued interest
- accrued bonus
Check agreements/invoices if there is any additional
accrued expense should be recognized

Check invoices received by the company from the year

end to the audit field work. If there is any expense which
should be recognized in the fiscal year but those are not
recognized yet, determine PAJE considering materiality.
Check the revaluation if there is accrued expense in
foreign currency.
Check if the beginning balance in GL is the same as the
balance in the last year's audit report.
Obtain supporting documents and check when advance
will be realized as sales (reclassified to sales or other
account).

Check if there is long outstanding balance. If any, check

the reason and consider making an adjustment like above.

Check the nature of each advances.

- advances received from customer
- advances received from non customer→check the
nature
Check if the beginning balance in GL is the same as the
balance in the last year's audit report.
Compare to the last year's balance, check if there is any
additional loan to recognize.

Check all existing loan agreements with the list of loan

prepared by the client. Consider the following points:
- date of agreement
- bank/related party name
- principal amount
- interest rate
- maturity date
- repayment schedule

1.Send confirmation letters to all banks and related

parties. Then, check the balance of each loan in book with
the confirmations responses.
2. Reconcile any difference, if it exists.

If loan in foreign currency, it should be revaluated based

on the exchange rate at the year end.
- balance in original currency
- exchange rate at the year end
- balance in IDR
- balance in book
- difference(if any)
forex gain/loss from revaluation should be disclosed as
non-cash flow movement
If a maturity date is more than 1 year after the year end,
the amount paid after 1 year period should be reclassified
to non-current liabilities.
If the maturity date is coming within 3 months after the
year end or before the opinion date, check if the
agreement has been renewed.
Check if the beginning balance in GL is the same as the
balance in the last year's audit report.
1.Check all leasing agreements and prepare the summary
including information below:
- name of lessor
- date of agreement
- rent per month
- payment schedule
- lease term
- condition of early cancelation
2.Assess if a leasing agreement is subject to PSAK 73
Check the calculation sheet prepared by the client .

Check if the beginning balance in GL is the same as the

balance in last year's audit report.
-Prepaid tax
- Claim for tax refund
- Deferred tax assets
- Tax payables
- Deferred tax liabilities

Check the supporting documents with the above items.

If there is any difference between balance in book and the
payment evidence(prepaid tax)/SPT(payable), need to
reconcile.
Points to be checked are as follows:
- Prepaid PPh22: it cannot be credited if there is no
supporting documents(PIB,BPN( bukti penerimaan
negara))
- Prepaid PPh23: it cannot be credited if there is no
supporting document(Bukti Potong)
- Prepaid PPh21: PPh21 should be consistent with pay roll
calculation by the company.
- VAT IN/VAT OUT: typical reason of difference between
book and SPTare as follows:
* timing difference
* cancelation/amendment of faktur pajak

If there is any transaction like below with companies

outside Indonesia, it is possible to be subject to PPh26.
- interest payments
- dividend payments
- technical assistant fees/management fees/other
consulting fee payments
In this case, need to check;
- if the company has the certificate of domicile(COD)
issued by the tax office which the counterpart is located(if
the counterpart is located in Japan, COD issued by tax
office in Japan should be obtained)
Key items of CIT calculation provided by the company are
as follows:
-typical temporary differences:
*(employee benefit expense)-(employee benefit paid)
*depreciation due to difference of useful life between
commercial and fiscal
*provision of bad debt, bonus etc.
-typical permanent differences:
*benefit in kind (apartment for expats, income tax paid
for expats, travel expense for non business related, HP
expenses, rental car expense,welfare expense etc)
*tax penalty
*Donation
-tax payable PPh29 = (taxable income)× tax rate-(Prepaid
22,23,25)

Check the calculation of deferred tax. Consider the

following points:
- deferred tax is consistent with temporary difference
- balance of deferred tax assets/liabilities are tied up with
the following formula:
(the difference of book value between in commercial and
fiscal)x (applicable CIT rate)
- applicable tax rate should be considered when the
temporary difference will be realized(e.g. if the temporary
difference is planned to realize in FY2021, the tax rate for
DTA calculation should be 22%. if the temporary
difference plans to realize after FY2022, the tax rate for
DTA should be 20%.

If the company has loss carry forward, we need to check

the following:
- loss carry forward expires in 5 years, so it should be
considered if the company can obtain taxable income
within the next 5 years
- a loss carry forward can be subject to deferred tax asset
if the loss carry forward can be offset with taxable
incomewithin the next 5 years
- since the amount of loss carry forward is
amended/written off as a result of tax audit, we need to
pay attention if the company takes tax audit or not.

-If there is overpayment of the corporate income tax after

CIT calculation, we need to confirm if the company
requests to claim tax refund or not. If not, prepaid PPh22,
23 and 25 should be reclassified to expense.
-If there is outstanding claim for tax refund from the
previous year, we need to check the condition of tax audit
and collectability of the tax refund.
Ask the client if the company takes tax audit during the
fiscal year or not. If the tax audit is already finished during
the audit, the impact from tax audit should be adjusted.
- penalty charged as a result of tax audit
- additional CIT charge as a result of tax audit
- correction of loss carry forward
- reduction tax refund
Check if the beginning balance in GL is the same as the
balance in the last year's audit report.

If the impact of employee benefits is material, those

employee benefits should be recognized based on PSAK
24 and request the company to get a certified actuary's
report.

Check the actuarial report prepared by the actuary

considering the following points:
- beginning balance of employee benefit is correct or not
- number of employee is correct or not
- discount rate is appropriate or not
- benefit paid is based on the actual payment by the
company or not
- plan asset is based on the report provided by the
insurance company(if any)
- actuarial gain/loss is rational considering movement of
discount rate/salary increase or other assumptions.
- if there is other long term benefit, we need to check if
the company has other special employee benefit
programs and need to confirm with the actuary why other
long term benefit is recognized.

-Need to confirm with the client if there is any additional

agreement with banks and financial institutions such as
forward contracts, swap contracts or any other
delivertives. If any, accounting treatment should follow
the accounting standard regarding financial instruments.
- Need to check bank confirmation carefully if there is any
contract other than loan and saving/current account.
Check if the beginning balance in GL is the same as the
balance in the last year's audit report(Especially for the
balance of retained earnings)
Check the composition of shareholders with the latest
Akta and approval from the ministry of law and human
rights.
If any capital increase, we check if the capital increase has
been already authorized by the Akta and approval from
the ministry of law and human rights.
If any capital increase in foreign currencies, the amount
recognized as capital should be the amount shown in the
Akta, and the difference with actual received from
shareholders should be recognized as additional paid in
capital.
Compare with the amount of sales in the previous year
and analize the reason of mutation.

Obtain the supporting documents of sales and check with

its accuracy of sales;
- invoices (the amount of sales and customer)
- delivery note (the timing of sales recognition)
- cash receipt (collectibility of receivables)
Check the sales transactions near the end of the year if
sales is recognized correctly or not.

If any sales of non-operating assets like below, it should

be reclassified to proper account;
- sales of fixed assets-other income
- sales of scrap or waste-other income
- rental income-other income
- discount of purchase-offset with purchase
Compare with the amount of each account of COGS
previous year and analize the reason of mutation
Check if the inventory is reclassified to COGS when the
related sales is recognized correctly.

Check the accuracy of the classification items of expenses

such as COGS or operating expenses:
- depreciation(depreciation from assets for manufacturing
should be COGS etc.)
- salary and other labor costs (can be classified based on
the department)
- other overhead cost(based on the department)

Compare with each account of operating expenses of the

previous year and analize the reason of mutation.

check the accuracy of classification items of operating

expenses or operating expenses ;
- depreciation(depreciation from assets for the indirect
department(accounting etc.) should be operating expense
etc.)
- salary and other labor cost (can be classified based on
the department)
- other overhead cost(can be classified based on the
department)

Compare with the previous year's figures of each account

and analize the reason of mutation
Generally, the items classified to other income/expense
are as follows:
- financial income/expense (interest income/expense)
- foreign exchange gain or loss
- gain/loss from fixed asset disposal/sales
- income from non-operating sales
- other expense which are not classified to COGS or
operating expense
-income/expense which is not material.
If there is any material or and extraordinary amount in
other income/ expense , we need to check the supporting
documents and the nature of transaction.

Need to reconcile the amount of related party

transactions with the following items:
- receivables/payables based on the aging list
- sales/purchase/expense based on GL
- response to confirmation letter from all related party
- management confirmation about related party
transactions
Date