Answered step by step
Verified Expert Solution
Question
1 Approved Answer
May I get some help please. Review the four confirmation responses provided with the assignment. Enter the information into Work Paper 10-1. For each confirmation
May I get some help please.
Review the four confirmation responses provided with the assignment. Enter the information into Work Paper 10-1. For each confirmation response, please determine whether the difference noted by the customer represents a misstatement or a timing difference. After reviewing all four confirmations, please complete nonstatistical evaluation options on Work Paper 10-1 . Fields you are to complete on work papers are colored yellow. The color will disappear when the field is completed.
In this mini-case you will complete the test of details on accounts receivable for the 2022 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. Tolerable Misstatement$600,000.67 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. EARTHWEAR CLOTHIERS Evaluation of A/R Confirmations December 31, 2022 In this mini-case you will complete the test of details on accounts receivable for the 2022 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. Tolerable Misstatement$600,000.67 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. EARTHWEAR CLOTHIERS Evaluation of A/R Confirmations December 31, 2022
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started