Presentation on Audit under

SAP Environment

By :
CA Archit Shah
(SAP FI Consultant)
Provide participants with an overview of the
necessary aspects needed to understand general
SAP concepts, and obtain usable data extractions
from SAP for the purpose of serving an Audit
 It is SAP and not SAP
 In German...
Systeme, Anwendungen, Produkte in der
Datenverarbeitung
 In English...
Systems, Applications & Products in Data
Processing
 IT’S AN APPLICATION DRAWING DATA FROM
DBMS (Database)
 CONFIGERATION IS VERY EASY AND FLEXIBLE
 ITS’ CLASSED AS AN ERP SYSTEM
 SECURITY AUTHORIZATION CAN BE DONE AT
DIFFERENT LEVELS AND IS VERY COMPLEX AS
WELL AS EASY
 APPLICATION PROGRAM – CONTROLS
RECORDING UPDATING AND READING DATA
FROM DATABASE IN REAL TIME
 Enterprise Resource Planning (ERP)
An information system designed to integrate
and automate the business functions of
medium and large companies
Purchasing
Manufacturing
Distribution
Personnel
Financials & Controlling
Slide 5
 SAP
 Oracle / Peoplesoft
 SSA (BAAN/Marcam)
 Microsoft Dynamics
 SD
MM
PP
CO
FI

AM
ERP QM
PS
PM
WF
IS HR
Presentation - SAP R/3-S/W-GUI with which users
interact
Layer

Application - Application Servers-with SAP R/3 Kernel

that run ABAP programs (WIN 2003/Server
Layer Pack 1/Windows 8)

-RDBMS -ABAP/4 Dictionary, source

Data Base &executable program.
Layer -T-codes = 120314
- Database Tables =35650
 DOC Type
 DOC Number
 Goods Issue (GI)
 Goods Receipt GR)
 GRIR Account
 Intermediate Document (Idoc)
 Work Breakdown Structure (WBS)
 Assets Under Construction (AUC)
 Stores Inventory
 Advanced Business Application
Program (ABAP)
 Audit Information System (AIS)
 System Architecture
 Business Process Overview
 System Modules
 Standard Tables
 Document Structure
 ABAP Functionality
 Audit Information System (AIS) Overview
 Legacy SAP
Separate ledger for A/P All transactions are
transactions included in one ledger
VS
Differentiate Differentiate transactions
transactions by GL by document type
Account
Relevant information
One entry contains all recorded in multiple
relevant information documents
The basic structure of SAP is fundamentally different
from that of a legacy system.

Legacy SAP
Accounts Accounts Materials
Receivable Payable Mgmt Inventory

Sales
General
Ledger Asset
Mgmt
General Finance
Inventory
Ledger Purchasing
 One central database

 Real time processing

 Allows integration of legacy systems

 Document Balancing

 Manages Work flow

Know that over 1,200 business processes can be defined
by SAP!
Highly flexible
Customized to fit Company
Can Choose implementation of
-Modules
-Business processes
-Import of Legacy/External Data
…Therefore every SAP installation is different!

 Have clear understanding of business

 Processes that are effected by SAP
 Document Types Used
 Data Integrity (Is it SAP created?)
 Data Reconciliation (Tolerances)
 CO – Controlling
-Plants, Chart of Accounts, Customer/Vendor Masters
 FI - Financial Accounting
-Financials, G/L, A/P, A/R
 SD - Sales and Distribution (Orders, Invoicing,EDI)
-Orders, Invoicing, EDI
 AM - Asset Management
-AUC account from A/P transactions
 MM - Materials Management
-Procurement for Production and Consumption
 PS - Project System (Construction Contractors)
 Master Tables
Chart of Accounts
Customers
Vendors
Employee

 Transactional data
Sale Invoices (A/R)
Purchases (A/P)
Inventory Movements (MM)
Assets (AM)
Requisition

Purchase Tax Tax is estimated on the

Order Calculation
Purchase Order
Goods
Receipt Tax is expensed at
(optional)
Goods Receipt
Invoice Tax
Receipt Calculation Tax is paid or accrued at
Invoice Receipt
Payment
to
Vendor
Goods Receipt
Material 100.00 -
Cenvat Clearing 12.36 -
GR/IR Clearing - 112.36
Invoice Receipt
GR/IR Clearing 112.36 -
Vendor ABC Company - 112.36
Excise Credit
Cenvat Receivable 10.00 -
E.Cess 2.00 -
Hcess 1.00 -
Cenvat Clearing - 12.36
Goods Receipt
678910 Supplies 100
210090 GR/IR Clearing (100)

Invoice Receipt
210090 GR/IR Clearing 100
323456 Vendor ABC Company (100)
Goods Receipt
Material 100.00 -
Cenvat Clearing 12.36 -
GR/IR Clearing - 112.36
Invoice Receipt
GR/IR Clearing 112.36 -
Vendor ABC Company - 111.36
Rate Difference/Material - 1.00
Excise Credit
Cenvat Receivable 10.00 -
E.Cess 2.00 -
Hcess 1.00 -
Cenvat Clearing - 12.36
 Invoice Tax
Receipt Calculation Tax is paid or accrued at
Invoice Receipt
Payment
to
Vendor

Tax Paid to Vendor (Amounts include estimated tax)

Invoice
678910 Supplies 10.83
323456 Vendor ABC Company (10.83)
Invoice
678910 Supplies 10.83
323456 Vendor ABC Company (10.00)
193010 Tax Accrual (0.63)
193010 Tax Accrual (0.10)
193010 Tax Accrual (0.10)
 Sales Tables
Customer Master (KNA1)
Sales Document Header (VBAK)
Sales Document Line Items (VBAK)
Billing Header Data (VBRK)
Billing Line Items (VBRP)

 A/P Tables
Vendor Master (LFB1 and LFA1)
PO Order Info (EKKO and EKPO)
Goods Receipt Line Items (EKBE)
Payables G/L Line Items (BKPF and BSEG)
Challenges in SAP that don’t exist in
other systems!
To overcome these challenges
 Understand SAP document types
 Specific Number Ranges apply to each
 Specific G/L Accounts mapped to each Doc Type
AP Doc Types
KA-KZ (vary by company)
KI-Interface (Legacy/P-Cards)
KN and/or RN-Non PO (aka Net Invoice)
KR and/or RE-PO issued
 Sales Doc Types
SA-SZ*
S1-S9*
*Will vary by Sales Channel / Revenue Source

Other Document Types (MM, Stores Inventory)

WA-Goods Issue
WE-Goods Receipt
Used for Prepaid Expense Inventory Tracking

Goods receipt document contains link to Vendor and

A/P transaction info!
 General Ledger
Central pool of financial data
Real-time update of sub-ledgers and GL

 Special purpose Ledger

User created combinations of entered data
Generate data summaries for planning, allocation,
distribution
Cost center accounting
Accounts Receivable and Payable – Sub-ledgers

Integrates with GL
Sales and Distribution
Materials Management.
Vendor and Customer information
Payment automation (EFT and check processing)
Asset Accounting Subledger - (FI-AA)

Captures asset related transactions

Country-specific depreciation charts
Compliance with local legal requirements
Asset Accounting Sub-ledger - (FI-AA)
Follows asset life cycle
requisition to retirement
integration with Plant Maintenance component to
manage
-machinery and equipment
-leased assets and assets under construction

Provides for interactive reporting

 PO Purchases vs. Non PO
 GR/IR Transactions
 Assets under Construction
 Multi Location Purchases
 MM Docs (Stores Accounts)
 EDI(Electronic Data Interface)
 ABAP (standard reports)
 Query (individual inquires)
 All downloadable
Unconverted text
Excel
Word (Rich Text)
HTML
Print Files
 System Audit
System functions
 Business Audit
Accounts
Financial Statements
Assets
Liabilities
P&L
 Balance Sheet
 P&L
 Accounts
 Vouchers
 SD,FI, MM, PP, HR , CO
 Parked Document
 Allows for entry and storage of an unfinished
document in the system. A “parked” document is
pending posting (No financial Effect and used for
dual controlling) and once it is posted by authorized
person document is posted with the same document
number.
 Hold Documents

Same as Parked documents but the same can be posted

by the same person who have put the document on
hold. Once it is posted new document no is generated.

 Posted Documents

Once the document is posted it effects the financials of

the company.
 While doing audit auditor must take special
care about the document which are put on
parked / hold and find out the reason about
the same.
 Auditor should also see that the document
which were parked/hold and later on posted
the duration between these two as it should not
be longer and if so then ask the reason about
the same.
 Let’s See some Screen Shot for SAP R/3 with
their T-codes which are useful for conducting
the Audit work
Click on the “Display
Document Header” 4th
icon (Hat)
to view document
audit
trail.
 You can compare it with Organizational
hierarchy of Authority and responsibility (Who
is authorized to approve the document and
who had entered and posted the document).
 You can also view that the period open till
what date and whether it is Approved by the
management that the period should be open
for such time.
 Form above if you subtotal the field of clearing
document it will show you the document with
it clearing document together so that you can
confirm that the document is cleared either by
making payment or reversing the same
together.
 Special G/L Tab shows you whether the
company had paid advance payment to the
supplier as it is not regular payment it is shown
as special transaction and hence it is not
displayed in regular transaction and shown as
special G/L.
 Needs to be turned on
 Standard Views/Reports
 Limited Online-Transaction Inquiry
 Can’t access Historical Data
 Potential large volume of transactions
 Developed primarily for financial audit
www.sapfans.com
www.sap.com
www.mysap.com
www.asug.com*
www.erpfans.com
www.acl.com
*membership fee may be required
 We had seen SAP R/3 now let’s see another
product of SAP i.e. SAP Business One which is
specially designed to serve Small Medium
enterprises
 SAP Business one – target customers are Small
Medium Enterprises
 Not much complex as well as costly as
compared to SAP R/3
 Menu driven and not T-code driven as SAP
R/3
 Not much customization is possible
 No modules needs to buy entire package and
Restrictions can be done on the basis of License
purchased
 More or less Serves to all manufacturing
process except HR and AM (Asset
Management)
 Limited MRP and Production customization is
possible
 External soft ware can be connected to SAP
Business One either by using SDK or DTW
(SAP B-One tools).
 Now Let’s See some screen shots and reports in
SAP Business One
 Customized Reports
 Are prepared by the programmer as per requirement
of management which are not fulfilled by standard
reports
 While reviewing from customized reports auditor
must compare with the SAP standard report because
SAP Standard reports are fully tested by SAP team
as well as SAP Consultants.
I am honored to have been given this opportunity
to present my esteemed colleague members
Presentation on Audit under SAP Environment
which would be helpful to you.