Determining materiality is necessary to plan audit procedures. Auditors establish two levels of materiality 1) planning materiality and 2) performance materiality. It could be deemed that planning materiality, which represents the overall materiality for the financial statements as a whole, is all that is necessary and that performance materiality, which is tolerable misstatements at the general ledger account level, isnt necessary.

Explain why you feel or dont feel it is truly necessary to establish a performance materiality level.

Which type materiality do you feel is most effective to auditors in planning audit procedures and why?