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Chapter 01 Mini-Case EarthWear IntroductionThe purpose of this mini-case is to familiarize you with the EarthWear Mini-case website(and, more specifically, the EarthWear Clothiers Investor and Willis and Adams, CPAswebsites, ). These sites will be used for mini-cases throughoutthe semester and will provide hands-on applications for the auditing principles you will belearning. In this case, you will be asked to find several different pieces of informationpertaining to EarthWear and its auditor, Willis & Adams, CPAs.Find the information requested below and record your answers in the space provided asevidence that you've visited the sites. Remember that the purpose of this exercise is tobecome familiar with these websites, so please take a few minutes to look around. Thisactivity is not meant to be difficult but the more familiar you are with these sites the moretime you will save on future assignments.1.Who is the current CEO of EarthWear?2.How much did Accounts Payable change in dollars and percent from 2012 to 2013?3.In which of the last 5 years was EarthWear's Net Income highest, and what was Net Income inthat year?4.Does EarthWear use the FIFO or LIFO inventory valuation method?5.What 5 services does Willis & Adams, CPAs provide to clients? Refer to the Willis & Adamswebsite?6.What are the names of the three current staff accountants listed on the Willis & Adams website?7.What is the date of Willis & Adams' most current engagement letter with EarthWear?-2-2Calvin J. RodgersIncreased $14,077 or 29.07%2010 (Net Income of $41,698)LIFO (Last In, First Out)Assurance Services, Tax Planning, Business Planning, Valuation Services, and Litigation Support Services.Michael Willis, Scott Adams, Karen Mitchell
PART TWOIn this case you will complete the audit planning memo for the EarthWear engagement.Additional information to help you prepare this memo can be obtained from the EarthWearand Willis & Adamswebsites.A planning memo is typically used to summarize the considerations and conclusionsinvolved in several of the audit planning phases you’ve read about in Chapter 3.Chapter 03 Mini-Case Audit Planning Memo Part 11.Willis and Adams, CPAs uses the template shown in the "Audit Planning Memorandum"to prepare the planning memo. Some portions have already been completed or begun.These portions are indicated in plain text. Portions highlighted in green will be completedby other auditors; however, brief descriptions of what will be included in these sections ofthe planning memo are included in the template for instructional purposes. For each of thememo topics that remain to be completed (areas highlighted in yellow), you shouldaddress at least two key points about EarthWear Clothiers or the mail order clothingindustry. Keep in mind that the points you identify should have important implications forthe audit. Address each topic using information from the EarthWear and Willis & Adamswebsites, the textbook, the work papers provided in this workbook, and prior mini-cases.