Sasbadi Annual Report 2017

143 ANNUAL REPORT 2017 INDEPENDENT AUDITORS’ REPORT Key Audit Matters (continued) 2. Valuation of trade receivables Refer to Note 9 to the financial statements. The key audit matter How the matter was addressed in our audit The Group’s exposure to credit risk arises principally from its receivables from customers. The recoverability of trade receivables is a key audit matter as the recoverability and the level of impairment loss of trade receivables involved Group’s judgement. The level of impairment loss involves Group ’s judgement based upon the debtors’ credit risk evaluation, historical payment trends, subsequent to year end collections. These factors could have a material impact on the level of impairment loss determined by the Group. We performed the following audit procedures, amongst others, around recoverability of trade receivables: x We checked the accuracy of trade receivables ageing; and, x We evaluated the Group’s estimates and judgement in arriving the impairment amount by: - checking disputes with customers - checking past payment trend - checking credit history of customers - considering receivables where their ageing profile had deteriorated - considering receivables where there is evidence that the credit quality of the debtor is considered a risk - assessing the receipts during the year and subsequent to year end collections - considering actions taken by the Group to recover the debts.