Auditors always conduct their audit with a view to determine whether or not the financial statements are materially misstated. For this reason, auditors usually determine a materiality level to be used in conduct of the audit and also a performance materiality level may be set at less than the materiality for the financial statements as a whole.
(i) Explain why it is necessary for the auditor to determine the materiality
figure at the planning stage of the audit.
(ii) Distinguish between materiality for the financial statements as a whole and performance materiality.