$($Keep in mind that the confirmations were done as of December $31,$ but that Cloud $9$ has a January $31$ year$-$end. So$,$ pay special attention to balance as of the confirmation date.

Also be sure to state whether the misstatement is an overstatement, or an understatement and which accounts are affected. Also, be sure to clearly state the amount, if there is a misstatement.$)$

Customer No$.00158$ with a receivable balance of $$730,225$ on December $31,$ disputed receivables in the amount of $$30,500,$ as a shipment of shoes was not received until January $2,2026.$ Further investigation showed that the customer ordered the goods on December $31,2025,$ and they were not counted in inventory when the inventory was taken on that date. The freight carrier came by late in the day and picked up the goods, even though the warehouse was normally shut down for inventory on December $31,2025.$ The goods were shipped FOB shipping point. The receivable was paid in full on January $29,2026.$

$$ 

 

What is the audit conclusion for Issue $2?$

What is the misstatement with Issue $2,$ if relevant? $($If no misstatement, write "None".$)$