ISA 320 revision question (NBAA, C2, NOV 2018)

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.

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