You have been assigned to the recurring audit engagement of Cox Limited, a national grocery distributor. Your manager has asked you to identify significant accounts and limited risk accounts. Which of the following statements is correct as you prepare to complete this audit procedure? A limited risk account is an account that could contain a material misstatement because the balance exceeds TE. The determination of significant accounts and limited risk accounts is based only upon the materiality of the account balance. A significant account is an account that could contain a material misstatement based on its size or that has a risk of material misstatement associated with it. The significant accounts and limited risk accounts should be the same as those identified in the prior year audit engagement unless the materiality has fluctuated significantly.