OTC-06

Control Description

Management performs a periodic review of sales order gross margins to identify and investigate transactions with abnormal discounts, manual price overrides, or low-margin profiles.

Risk

Unauthorized manual price overrides or excessive discounts could go undetected, resulting in compressed profit margins, unapproved concessions, and lost revenue.

Implementation Details

Below is a suggested approach. In full transparency, margin analysis
is challenging with SAP due to the derived nature of margins (not
persisted in the database), requiring joins across multiple transaction
tables

Build a CDS view that reconstructs actual margin by sales order/order line
using the following tables:
- VBAP (Sales order line items - revenue, pricing)
- VBRK/VBRP (Billing documents - links order to invoice)
- MSEG (Material documents - actual goods receipts with valuations)
- MKPF (Material movement header - transaction context)

Logic:
- Join VBAP to VBRP to MSEG to capture order-level revenue and actual COGS
- Calculate margin as: (Revenue - Actual COGS) / Revenue
- Filter for abnormal thresholds
- Report at order/order-line level

Test Procedures

Test of Design (TOD)
•Walkthrough & Inquiry: Inquire with AP management to understand the process for reviewing sales order margin

Test of Operating Effectiveness (TOE)
• Sample Selection: Select a sample of test periods
• For the selected periods, inspect the evidence of the review