An auditor seeks to select the best market approach for the materiality threshold. The auditor studies Gutierrez et al.'s (2018) investigation into the effects of the materiality threshold on audit quality and decides that this approach is best practice. The auditor decides to use this approach for the financial report as a whole. As, the audit is high risk, the auditor also decides to set a low level of materiality to appropriately reduce the probability that the aggregate misstatement exceeds the materiality threshold. The following financial information is extracted from the clients financial statements: 30 June 2021 30 June 2022 Total Assets $600 million $550 million Total Revenue $480 million $420 million Net Profit $23 million $41 million Use the following table in calculating your answer: Rules of thumb (Materiality) Bases Percentage (%) Net Profit 5 10 Total Revenue 0.5 1 Total Assets 0.5 1 Required: a) Given this information, calculate what the performance materiality and the overall materiality should be for for the audit ended on 30 June 2022 (15 marks) b) Explain why materiality is considered an important concept in auditing