Final Audit Project.docx ACC 645 Final Audit Project Southern New Hampshire University A

Final Audit Project.docx  ACC 645  Final Audit Project Southern New Hampshire University ACC 645: Advanced Auditing  Client Engagement  Corporate Structure  The client, EarthWear Clothiers (EWC), makes high-quality clothing for outdoor sports, as well as casual clothing, accessories, shoes, and soft luggage. The products are sold on EarthWear™s website, in retail outlets, and through catalogs.  EWC sells its products in the United States, Europe, and Japan. EWC™s competitors are retail stores, specialty stores, department stores, and catalog companies.  EarthWear Clothiers has a broad growth strategy. The company plans to expand its customer base and improve product offerings to increase sales. The company plans to increase sales by offering more products on its website and by sending special issues of catalogs to existing customers.  The annual report shows the majority of EWC™s revenue is made from catalog sales, at  74%. Website sales equate to 21% of revenue and retail stores bring in 5% of revenue. The annual report shows that EWC is a seasonal business, with most of its profits being realized during the 4th quarter.  In 2015, 37% of total revenue came in the 4th quarter and 12% of net sales were made from liquidation sales.  Liquidation sales were made through catalogs.  In 2015, total revenue increased 10.8% and net income decreased 27.8%. At the end of 2015, EWC had no long-term debt outstanding. The annual report shows the financial statements conformed with Generally Accepted Accounting Prin