2. Evaluate Threshold for Unexpected Fluctuations Lists of Balance Sheet and Income Statement accounts have been generated below based on your threshold for account difference. In the "Evaluation" column please identify 1 or 2 balance sheet and 1 or 2 income statement accounts where you believe the difference presents increased risk of material misstatement that may require a change in the nature, timing or extent of planned audit procedures. Please indicate possible reasons for the difference, potential risks, and suggested audit plan revisions.

A. Balance Sheet Accounts Account Difference from Expectations Evaluation

Cash and cash equivalents $31,071

Receivables, net ($5,568)

Inventory $8,444

Other prepaid expenses ($3,414)

Computer hardware and software ($7,107)

Lines of credit ($3,892)

Accounts payable ($22,401)

Accrued liabilities $5,456

Income taxes payable $5,711

Deferred income taxes ($4,666)

Additional paid-in capital $3,550

Accumulated other comprehensive income ($3,855)

Treasury stock, 6,654, 7,114, and 6,546 shares at cost, respectively $23,926

B. Income Statement Accounts Account Difference from Expectations Evaluation

Net Sales ($23,193)

Cost of sales ($47,893)

Selling, general and administrative expenses ($18,851)

Income tax provision $10,864