ProAudit & Co has served for over 15 years as the auditor of the financial statements of Salva Bank. The firm is conducting its audit planning for the current fiscal year and is in the process of performing risk assessment procedures. Based on inquiries and other information obtained, the auditors learned that the bank is finalizing an acquisition of a smaller community bank located in another region of the state. Management anticipates that the transaction will close in the third quarter, and, while there will be some challenges in integrating the IT systems of the acquired bank with Salva Banking systems, the bank should realize a number of operational cost savings over the long-term. During the past year, the bank has expanded its online service options for customers, who can now remotely deposit funds into and withdraw funds from checking and savings accounts. The system has been well received by customers and the bank hopes to continue expanding those services. The challenge for Salva Bank is that they are struggling to retain IT personnel given the strong job market for individuals with those skills. Credit risk management continues to be a challenge for Salva bank, and regulators continue to spend a lot of time on credit evaluation issues. The bank has a dedicated underwriting staff that continually evaluates the collectability of loans outstanding. Unfortunately, some of the credit review staff recently left the bank to work for a competitor. Competition in the community banking space is tough, especially given the slow loan demand in the marketplace. The bank has expanded its investment portfolio into a number of new types of instruments subject to fair value accounting. Management has engaged an outside valuation expert to ensure that the valuations are properly measured and reported. Fortunately, the bank's capital position is strong and it far exceeds regulatory minimums. Capital is available to support growth goals in the bank's five-year strategic plan. Required: i. Explain THREE (3) risks of material misstatement at the financial statement level. (9 marks) ii. Explain THREE (3) risks of material misstatement at the assertion level. (9 marks) iii. Explain TWO (2) risks would be considered as significant risk.