While assessing the risks of material misstatement, auditors identify risks, relate risk to what could go wrong, consider the magnitude of risks, and: _________ The answer can be found in the article covered in class AS2105 Federal Security Laws definition of fact is material when ....

Assess the risk of misstatements due to illegal acts.

Consider the complexity of the transactions involved.

Consider the likelihood that the risks could result in material misstatements.

Determine materiality levels.