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8) Qualitative factors can affect an auditor's assessment of materiality. Which of the following statements is true? I. Misstatements that are otherwise immaterial may be material if they affect earnings trends. II. Misstatements that are otherwise minor may be material if there are possible consequences arising from contractual obligations. A) I only B) II only C) I and II D) neither I nor II 9) The five steps in applying materiality are listed below in random order. 1. Estimate the combined misstatement. 2. Estimate the total misstatement in the segment. 3. Set materiality for the financial statements as a whole. 4. Determine performance materiality. 5. Compare combined estimate with preliminary judgment about materiality. The first three steps in correct sequence would be: 10) Which of the following statements is not correct? 11) Certain types of misstatements are likely to be more important than other types to users, evenif the dollar amounts are the same. Which of the following demonstrates this?
Amounts involving frauds are considered moreimportant than errors of equal amountMisstatements that are otherwise immaterial may be material if they affect a trend in earningsNoYes12) When setting a preliminary judgment about materiality: