In considering overall materiality for planning purposes, an auditor believes that misstatements aggregating $10,000 would have a material effect on an entity's income statement but that misstatements would have to aggregate $20,000 to materially affect the balance sheet. Ordinarily, it would be appropriate to design audit procedures that would be expected to detect misstatements aggregating:

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In audit planning, the auditor should design procedures to detect misstatements at the lower level of materiality to ensure that all material misstatements that could affect any of the financial statements are detected. In this case, $10,000 is the lower threshold that would materially affect the income statement, so audit procedures should be designed to detect misstatements aggregating at least $10,000.

In Considering Overall Materiality for Planning Purposes, an Auditor Believes