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Financial Statements Review. Food & Beverage Company

Financial Statements Review

Accounting

Invited by a client who just recently poured investment into a food and beverage (F&B) company with more than 20 outlets in Indonesia, we assisted the client by preparing financial statements of the Company and comparing with the ones provided by the management. The objective of this engagement was to compare our financial statements and the ones prepared by the management. We were also requested to identify the cause of any major differences.

The biggest challenge of this engagement is the availability of document and information. Eventhough the Company has been running for several years, the accounting function was still traditional. There was only one accounting staff. There were no journal entries. The Company only maintained list of transactions. As a result, the Company did not have balance. It only had profit & loss report, but the accuracy was highly questionable.

Eventhough the documents and information were scattered, our team of 5 consultants were able to input all entries and prepared the financial statements. The result was staggering. The profit presented in the financial statements prepared by the management was significantly overstated. The reasons for this were because the management’s calculation of COGS was inaccurate, there were several unrecorded expenses, and inaccuracy in cost capitalization. After two months of work, we were able to finish the project and received very good feedback from the client.


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