Presentation on Audit under

SAP Environment

By :
CA Archit Shah
(SAP FI Consultant)
Objective

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
What is SAP?
 It is SAP and not SAP
 In German...
Systeme, Anwendungen, Produkte in der
Datenverarbeitung
 In English...
Systems, Applications & Products in Data
Processing
Cont….
 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
 SAP and ERP
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
 ERP Major Players

SAP
Oracle / Peoplesoft
SSA (BAAN/Marcam)
Microsoft Dynamics
SAP -R/3 Enterprises - Application components

SD
MM
PP
CO
FI

AM
ERP QM
PS
PM
WF
IS HR
SAP R/3 –Architecture -3 Layers

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
Learn the Lingo
 DOC Type
 DOC Number
 Goods Issue (GI)
 Goods Receipt GR)
 GRIR Account
 Intermediate Document (Idoc)
 Work Breakdown Structure (WBS)
 Assets Under Construction (AUC)
Learn the Lingo (cont’d)
 Stores Inventory
 Advanced Business Application
Program (ABAP)
 Audit Information System (AIS)
SAP R/3 Overview
 System Architecture
 Business Process Overview
 System Modules
 Standard Tables
 Document Structure
 ABAP Functionality
 Audit Information System (AIS) Overview
 SAP Architecture
Legacy SAP
Separate ledger for A/P All transactions are included
transactions in one ledger
VS
Differentiate transactions by Differentiate transactions by
GL Account document type

One entry contains all Relevant information

relevant information recorded in multiple
documents
 SAP Architecture (cont’d)
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
 SAP Advantages
 One central database

 Real time processing

 Allows integration of legacy systems

 Document Balancing

 Manages Work flow

 SAP Business Processes
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
SAP Business Processes
…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)
 SAP R/3 Modules
 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)
SAP Tables-General
 Master Tables
Chart of Accounts
Customers
Vendors
Employee

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

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
 Purchase Order Invoice Example 1
Use Tax Accrued (No tax on vendor invoice)

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
Purchase Order Invoice Example 2
Tax Paid to Vendor (Amounts include estimated tax)

Goods Receipt
678910 Supplies 100
210090 GR/IR Clearing (100)

Invoice Receipt
210090 GR/IR Clearing 100
323456 Vendor ABC Company (100)
Purchase Order Invoice Example 1
Price difference

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
 Non-Purchase Order Invoice

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)
Non-Purchase Order Invoice Example 2
Use Tax Accrued (No tax on vendor invoice)

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)
SAP Tables-Examples
 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)
 Audit Challenge
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
Audit Challenge (cont’d)

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!
 R/3 Financials
(Financial Accounting -FI Module)

 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
 R/3 Financials
(Financial Accounting -FI Module)

Accounts Receivable and Payable – Sub-ledgers

Integrates with GL
Sales and Distribution
Materials Management.
Vendor and Customer information
Payment automation (EFT and check processing)
 R/3 Financials
(Financial Accounting -FI Module)

Asset Accounting Subledger - (FI-AA)

Captures asset related transactions

Country-specific depreciation charts
Compliance with local legal requirements
 R/3 Financials
(Financial Accounting -FI Module)

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

Lessons Learned

PO Purchases vs. Non PO

GR/IR Transactions
Assets under Construction
Multi Location Purchases
MM Docs (Stores Accounts)
EDI(Electronic Data Interface)
Methods for Data Evaluation
 ABAP (standard reports)
 Query (individual inquires)
 All downloadable
Unconverted text
Excel
Word (Rich Text)
HTML
Print Files
Audit In SAP
 System Audit
System functions
 Business Audit
Accounts
Financial Statements
Assets
Liabilities
P&L
Business Audit
 Balance Sheet
 P&L
 Accounts
 Vouchers
 SD,FI, MM, PP, HR , CO
Control Compliance
 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.
Cont…

 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.
Cont..
 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.
SAP R/3 T-codes with Screen

 Let’s See some Screen Shot for SAP R/3 with their T-codes
which are useful for conducting the Audit work
SAP R/3 Document Display
Click on the “Display
Document Header” 4th
icon (Hat)
to view document
audit
trail.
Cont…
 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.
General Ledger Line item view (T-code : Fbl3n)
Display General Ledger Balance(T-Code:FS10n)
Vendor Line Item display (T-code : Fbl1n)
Cont…
 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.
Vendor Balance Display (T-code: Fk10n)
Cont…
 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.
Customer Line Item display (T-Code: Fbl5n)
Customer Line Item display (T-Code: Fd10n)
SAP R/3 Asset Balance Display (T-Code – AR01)
SAP R/3 Asset Depreciation Display (T-Code –AR03)
A.I.S Limitations
 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
 Web Hot Links
www.sapfans.com
www.sap.com
www.mysap.com
www.asug.com*
www.erpfans.com
www.acl.com
*membership fee may be required
Another Product
 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
 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
Cont.
 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).
Cont…
 Now Let’s See some screen shots and reports in SAP Business
One
SAP B-One –Home Screen
SAP Business One Screen Restrictions
SAP B-One –COA
SAP B-One –Analysis for Sales Report
SAP B-One –Open Items (Sales)
SAP B-One – Sales Reports
SAP –Business One Financial Reports
SAP Business One GL Report
SAP Business One GL Report - 1
SAP Business One Journal Document Report
SAP Business One Journal Document Report -1
SAP Business One - Customer Aging Report
SAP Business One Customer Aging Report -1
SAP Business One – Balance Sheet Comparison
SAP Business One – Various Banking Reports
SAP Business One Trial Balance
SAP Business One – Customized Reports
SAP Customized Reports
 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.
Thanking You

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.