Impairment account receivables

Allowance for doubtful account

As an auditor, I have to make sure that the receivables are evaluated because they are in it estimate.

Miscalculation and estimation can lead to default risks

auditor procedures

1. Examining the control and internal control systems used by the management to determine the
provision for impairment of receivables

2. Testing the mathematical accuracy of the expected credit losses model by the administration

3. Evaluate the main assumptions used by management in the calculation, such as the customer's
probabilities of default and subsequent loss upon default

Assertion for account receivable:

Completeness/ existence

Obtain conformation customers to make sure from the exist of account receivable and the accuracy of
the amounts.

Make sure that there is no fake account receivable and the right of account receivable belong to the Je
pharm company (right and obligation).

Inventory

Provision for damaged and obsolete goods

Inventories are stated at cost, or net realizable value, whichever is lower

To make sure from the existence assertion, we can round the ending balance in the warehouses and
compare it with the inventory balance {physical examination}

Valuation and allocation assertion:

1- Check the classification of the inventory Raw goods and spare parts, and Finished goods and
goods under manufacturing.
2- Check the purchase sale process cutoff if it proper.
3- Calculate the inventory days in ratio and inventory turnover, and compare this ratio with
previous years.
4- Check if the right of the inventory belongs to Je pharm.
5- There is no inventory pledged or collate red.
6- Check the calculation of the net realizable value if it is correct or not.
Al-Quds Pharmaceuticals Company, a public shareholding company, was established under Companies
Law 12 of 1964 and was registered as a public shareholding company under No. 562600197 on April 1,
1978. The company’s shares are traded on the Palestine Stock Exchange, and the company operates
through its main office in Al-Bireh.

During the period from incorporation until June 30, 2013, the company increased the authorized,
subscribed and paid-up capital of the company in stages to become 17,060,000 US dollars distributed
over 17,060,000 shares of one dollar each.

The extraordinary general assembly decided in its meeting held on April 24, 2013 to increase the
authorized capital of the company to 18,000,000 shares with a nominal value of one US dollar per share.
The Palestinian Capital, according to its Resolution No. pcma/diwan/5848/2016, bringing the number of
authorized, subscribed and paid-up shares to 18,000,000 shares, at one dollar per share.

One of the main objectives of the company is to establish a factory for the production of medical and
chemical preparations, general trade, import and export, and to contribute to local and foreign
investments.

The consolidated financial statements were approved and approved for issue by the Board of Directors
on March 30, 2023

It includes the consolidated financial statements of Jerusalem Pharmaceutical Company and its
subsidiaries as of December 31, 2022. The financial statements of the company and its subsidiaries have
been consolidated on the basis of aggregating each item of assets, liabilities and business results of the
company with items of assets, liabilities and business results of subsidiaries, after excluding all current
account balances and transactions between the Company and its subsidiaries.

The company invested and controlled other companies as follows

Jordan River Company in Jordan by 100%

Al-Quds Pharm Company in Algeria by 100%

Superdeem company in Algeria by 100%

Dar Al-Qalam Company in Palestine by 55%

Masrouji Balsam Company in Palestine by 51% in 2021 and zero in 2022