You are auditing prepaid expenses. The total balance is $2 million. Assume you used sampling and you selected three items to test. You compared them to the supporting documentation and found the following: Item 1 – recorded correctly as $5,000 Item 2 – recorded correctly as $3,000 Item 3 – recorded as $2,000, but it was a typo, and it should have been recorded as $200. Assume the overall materiality is $500,000, the performance materiality is $400,000. Does the result of your test suggest a potential material misstatement in prepaid expenses? Explain how you determine that. Please show work.