Qualitative Factors Can Affect an Auditor's Assessment of Materiality

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) both I and II
D) neither I nor II

Correct Answer:

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