© 2009 by SAP AG. All rights reserved. / SAP University Alliances Page 1 Primary Learning Objectives Use the SAP system to experience the steps in a typical sales transaction See how a highly integrated ERP system (SAP) handles a typical sales transaction Work through the procedures involved in a test of transactions Look at a special feature of the sales and distribution (SD) module of SAP Accounting Information Systems

Sales Cycle Payment Received Invoice Generated Collections Goods Delivery Sales Order Customers PO Product Information to Customers Advertising Marketing Sales Department Materials Mgmt Accounting Idea for Chart taken from Univ. of Toronto Accounting Information Systems

Professions, Sales, and SAP Marketing Sales Materials Mgmt IT-Database with data integrity Product Preferences Customer Demand Levels Product Info and Pricing to Customers Stock Availability Customer PO / Sales Order Pick and pack the items Deliver the Goods Accounting Information Systems

Professions, Sales, and SAP Accounts Receivable Accounting & Finance Auditing IT-Database with data integrity Credit Terms / Limits Payment Received Aging of Accounts Collections Budgeting and Cash Flow Projections General Ledger Account Review Invoice Generation Allow for Doubtful Acct Calculation Oversight of Accounts Receivable Survey of Controls – including IT Tests of Controls Tests of Transactions Tests of Account Balances Accounting Information Systems

© 2009 by SAP AG. All rights reserved. / SAP University Alliances Page 5 Test of Transactions (Review) A test of transactions is an audit procedure used for compliance testing A normal business transaction is followed through all of the steps in the business process As the transaction is processed, for each step, all affected accounts are checked to certify that the transaction is being processed properly For this assignment the following accounts (A321) will be checked: Goods tracked in the inventory control area (in units) GL inventory GL cash GL sales revenue GL cost of goods sold GL AR control (Reconciliation Account in SAP terms) AR Subsidiary Ledger As you step through the assignment, these checks will show how the transaction is processed Accounting Information Systems

© 2009 by SAP AG. All rights reserved. / SAP University Alliances Page 6 Display Document Flow Feature The Display Document Flow feature of the SD module of SAP shows how all of the documents in the sales process are related and the completion state of each document at any point in the process This is a great illustration of how SAP generates documents at each step of a transaction It is also a great illustration of the integration of the SAP system Because of the linking one document to other related documents, you can select a document and view any prior or succeeding documents Accounting Information Systems

© 2009 by SAP AG. All rights reserved. / SAP University Alliances Page 7 Accounting Information Systems - Module 4 - Assignment Sales Example Using SAP ERP Assignment Learning Objectives: Experience the steps in a typical sales transaction See how an ERP system handles a typical sales transaction Work through the procedures involved in a test of transactions Look at a special feature of the sales and distribution (SD) module of SAP NOTE: You are to enter information into the system and also answer questions embedded within this assignment. Whenever an XX appears in the problem, you should enter your assigned two-digit number. An abbreviated assignment sheet is provided to you to complete. Use the same SAP instance and client that you used for the previous assignment. Accounting Information Systems

© 2009 by SAP AG. All rights reserved. / SAP University Alliances Page 8 Accounting Information Systems - Module 4 – Assignment Steps Create a Customer Master Record Set up Credit Limit for the Customer Check Inventory Availability Create a Sales Order Display the Sales Order and Record the Scheduled Delivery Date and Pricing Information Create the Delivery for Sales Order Post the Goods Delivered in General Ledger and Appropriate Sub-Ledgers Create an Invoice (Bill) for the Delivery Receive and Post the Incoming Payment in General Ledger and the Sub- Ledgers Accounting Information Systems

© 2009 by SAP AG. All rights reserved. / SAP University Alliances Page 9 Accounting Information Systems - Module 4 – Assignment - Things to Consider While completing this exercise make sure to think about the following controls: 1. Application Controls: (See list on last two pages) 2. General Controls: Segregation of Duties Proper Authorization Adequate Documentation Independence Checks Control of Physical Assets Accounting Information Systems

© 2009 by SAP AG. All rights reserved. / SAP University Alliances Page 10 Accounting Information Systems - Module 4 – Assignment NOTE: You are to enter information into the system and also answer questions embedded within this assignment. Whenever an XX appears in the problem, you should enter your assigned two-digit number. Log into the Riga instance, use client 300 and your USER-XX for your user name. An abbreviated assignment sheet is provided for you to complete. Accounting Information Systems

Application Controls IT application controls are fully-automated (i.e., performed automatically by the systems) and designed to ensure the complete and accurate processing of data. These controls may also help ensure the privacy and security of data transmitted between applications. Data that does not conform to these rules will have a negative impact on data integrity. (Source: Arkady Maydanchik (2007), "Data Quality Assessment", Technics Publications, LLC )

Application Controls, cont. Field Check – the application checks to see if only expected characters are present in a field (for example, a name should only include alpha characters) Sign Check – checks to see if the data being entered has the proper sign - positive or negative (for example, a cash deposit should only be a positive number) Limit Check – checks to see if the data being entered doesn’t exceed the limit authorized (for example, the largest number of cups that can be ordered for the coffee shop is 1,000) Range Check – checks to see if the data being entered is within the range allowed (for example, an Espresso Coffee purchase order can be no smaller than for one item and no larger than for 1,000 items) Source - Wikipedia

Application Controls, cont. Size Check – checks to see if the size of the data entered is consistent with the data type (for example, a U.S. phone number should be ten digits in length) Completeness Check – checks to ensure all data was entered and processed from initiation to completion (for example a purchase order form requires an item number, item quantity and item price to be entered. The system would make sure all of these data was entered and processed based on the rules defined in the system) Validity Check – checks to ensure only valid data is input or processed (for example, if a customer enters Boulder for their city, the system would check to make sure the zip code is a valid code for Boulder) Reasonableness Test – checks to see if data entered in the form is reasonable (for example, a customer who has consistently ordered ten lbs. of coffee a week submits an order for one hundred lbs.) Source - Wikipedia