On December 8, 2021, the 11th meeting of the Specific Industry Audit Class discussed the topic of auditing in the Fast Moving Consumer Goods (FMCG) industry, presented by Mr. Aditya Tirta as Audit Director of KPMG Indonesia. The session began with an introduction and a short explanation regarding the overview of FMCG companies that existed in Indonesia as well as the characteristics that differentiated this industry from the others. Mr. Aditya also discussed how technological advancements have influenced consumer consumption patterns, particularly among millennials. With the COVID-19 pandemic, the financial performance of FMCG has also been affected, where there were sectors of products that experienced decreases in sales, such as cosmetic products, but there were also products that went through the opposite, whereby they enjoyed sharp increases in sales, such as toiletries, hand soaps, and hand sanitizers that were deemed essential during the pandemic period.

The following discussion focused on auditing in the FMCG industry. Auditors need to pay close attention to certain accounts that have higher audit risks compared to the other accounts. In this industry, one of the more significant accounts is revenue accounts, where there are risks of trade loading, bill-and-hold, as well as trade promotions. Trade loading occurs when a company sells products to a distributor in excess of the capacity of the distributor. The company can offer discounts and rebates, as well as other incentives, and provide a return facility in case the products do not get sold. Bill-and-hold, on the other hand, is a practice where a company can sell and recognize the revenues earned from that sale immediately, while the product will not be sent to the customers until the designated date. These three practices all serve the same purpose: to increase the number of sales in the financial statement.

Other than these 3 practices, auditors also need to notice auditing risks in discounts, rebates, and incentives where inaccuracies in estimating the number can occur, as well as fraud indicators where the value of discounts, rebates, and incentives has been minimized in order to maximize the number of sales. Students were also given insight on which auditing procedures they needed to follow to tackle those risks.