Consider each of the qualitative considerations in setting materiality listed below. For each, describe why it could lead to users being more impacted by smaller levels of misstatements (i.e., why it could lead auditors to set materiality at lower levels).

- Materially significant segments

- Fraudulent misstatements

- Existence of contractual constraints

- Negative industry trends

- Incentives tied to goals

- Earnings expectations generated by market analysts