Datasonic Group Berhad 92 Key Audit Matters (Cont’d) We have determined the matters described below to be the key audit matters to be communicated in our report. Recoverability of Trade Receivables Refer to Notes 4.1(f), 4.10(a), 12 and 47.1(b) to the financial statements Key Audit Matter How our audit addressed the Key Audit Matter As at 31 March 2022, trade receivables that were past due and not impaired amounted to approximately RM8.732 million. The details of trade receivables and its credit risks are disclosed in Note 47.1(b) to the financial statements. The management applied assumptions in assessing the level of allowance for impairment losses on trade receivables based on the following:- • specific known facts or circumstances on customers’ ability to pay; and/or • by reference to past default experiences The Group assessed at each of the reporting date whether there is any objective evidence that trade receivables are impaired based on the validity of contractual terms, analysis of customer creditworthiness, past historical payment trends and expectation of repayment. The impairment assessment involved significant judgements and there is inherent uncertainty in the assumptions applied by the management to evaluate the adequacy of the allowance for impairment losses and estimation of future cash collection. We determined this to be a key audit matter due to the inherent subjectivity that is involved in making judgement in relation to credit risk exposures to assess the recoverability of trade receivables. Our audit procedures included, amongst others:- • reviewed and understand the management’s assessment of recoverability of major trade receivables; • reviewed contractual terms to ensure the Group has contractual right to recognise revenue and collect payments; • reviewed recoverability of major trade receivables including but not limited to the review of subsequent collections; • enquired management on project/receivables status for major customers; • reviewed collections and sales trends during the financial year of major trade receivables; and/or • reviewed management’s basis of estimation on the adequacy of the Group’s allowance for impairment loss on trade receivables. Independent Auditors’ Report to the Members of Datasonic Group Berhad (Cont’d)
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