In performing substantive analytical procedures,the threshold for determining whether differences between the client's account balance and the auditor's expectation should be based on planning materiality.

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The threshold for determining whether differences between the client's account balance and the auditor's expectation should be based on planning materiality. Substantive analytical procedures are performed to evaluate the financial information and to assess the risk of material misstatement. To determine the significance of the differences, the auditor compares the amount of the difference to the planning materiality. If the difference is greater than planning materiality, this suggests that there may be a material misstatement in the financial statements. Therefore, planning materiality is used as a threshold for determining the significance of differences when performing substantive analytical procedures.

In Performing Substantive Analytical Procedures,the Threshold for Determining Whether Differences