The auditor assesses the risk of material misstatement at two levels: the financial statement level and the assertion level. At the financial statement level, the auditor considers whether the financial statements as a whole are materially misstated. At the assertion level, the auditor considers the risk of material misstatement for each relevant financial statement assertion, such as completeness, valuation, and existence. By assessing the risk of material misstatement at these two levels, the auditor is able to develop an appropriate audit plan and apply audit procedures that are designed to detect material misstatements in the financial statements.