In this mini-case you will complete the test of details on accounts receivable for the 2019 audit of EarthWear Clothiers, Inc. The principal test of detail involves sending "confirmations" or letters to customers so that they can confirm that they owe EarthWear the reported balance. All six customer accounts receivable balances exceeding $100,000 were targeted for testing. These six balances, aggregated total of $921,000, were confirmed without exceptions. The remaining accounts are of similar size and total $7,722,000 and will be tested via audit sampling. Inputs for the sample size determination were, Desired Confidence Level--95%, Tolerable Misstatement--$600,000, and Expected Misstatement--$154,440. Based on these inputs, 67 accounts receivable balances were selected for confirmation requests. The first 63 accounts receivable confirmations have already been reviewed by other staff members and no errors have been found. The remaining four confirmations require your review as they were returned with notes from customers indicating a potential misstatement. Please note that legitimate timing differences do not result in misstatements.

VVUI Papel II EARTHWEAR CLOTHIERS Evaluation of A/R Confirmations December 31, 2019 Results of A/R Confirmations Customer ID 652-54310 Customer Name Red Star Health Group A/R Balance per clients' records $ 12,365 A/R Balance per Customer $ 12365 Difference per Customer $ 9 Reason(s) for Difference (i.e., timing difference, transposition error, cut-off error, mistake, etc.) transpose error 210-38725 Museum of Flight $ 14,235 $DO $ 14235 timing 254-62418 cut off error Summit Hills Country Club $ 24,362 $ $ 21520 2842 $ just a mistake 179-26343 Central States Hotels $ 63 additional items $ Total Dollar Amount of Items in Sample $ 18,642 880,560 950,164 $ 15642 $ 880,560 $ 930078 3000 $ 0 20086 $ Net misstatement Total Dollar Amount of Items in Sampling Populatior Nonstatistical Evaluation of Errors (Round your percentage answers for "Ratio of Misstatements" to 4 decimal places. Round all other answers to the nearest whole dollar. Leave no cell blank - Be sure to enter "o" wherever required.) Stratum Book Value of Stratum Evaluation of Test Results Ratio of Known or Book Value Factual Misstatements Projected of Sample - Misstatement in Stratum Misstatement** Tested $921,000 $ 0 O $950,164 $ 10 Total Projected Misstatement > $100,000 $ 921,000 $100,000 $ 921,000