3. Misstatements in a set of financial statements are caused by frauds, but not errors. options: True False

4. Risk assessment procedures include understanding internal control over financial reporting. options: True False

5. Which of the following statements is correct regarding the concept of materiality? options: Materiality thresholds are, ultimately, a matter of an auditor's judgment. Materiality judgments are determined via the auditors expectation of what would matter to company management. Materiality judgments are based on the consideration of quantitative factors only. Qualitative materiality factors are identical to inherent risk factors.