In February 2012, the Australian Accounting Standards Boards decided at its meeting to propose the withdrawal of AASB 1031 Materiality. There were several reasons for this proposal which includes: there is no International Reporting Standard equivalent and it does not look like there will be, since 2005 there has been the gradual withdrawal of additional Australian guidance from a number of Australian Accounting Standards, and there is now an updated guidance on materiality in the IASB Conceptual Framework. The major impact of the withdrawal of AASB 1031 is the removal of the specific quantitative guidance for materiality. The withdrawal of AASB 1031 became effective to annual reporting beginning on or after 1 July 2015.

REQUIRED:

1. Summarize the significant changes and impact on financial reporting with AASB 1031 Materiality (issued by the Australian Accounting Standards Boards - AASB) from 1995 to 2015.

2. Prior to the withdrawal of AASB 1031 and with reference to the AASB 1031 Materiality (issued by the Australian Accounting Standards Boards - AASB) and the ASA 320 Materiality in Planning and Performing an Audit and ASA 450 Evaluation of Misstatements Identified during an Audit (issued by the Auditing and Assurance Standards Board - AUASB)

a. Define materiality.

b. Outline the qualitative and quantitative guidelines of materiality.

c. How the concepts and constructs of "materiality" influence the auditors' professional judgment on misstatements?

3. Post withdrawal of AASB 1031, would this withdrawal of AASB1031 Materiality Standards:

a. harmonise/bring uniformity to auditors' assessment of materiality misstatements or would this bring disparity to auditors' assessment of misstatements? Why so?

b. What other influence, if any, this would bring to the auditors' judgment on misstatements and what impacts or implications this would have on the usefulness of financial reports? Discuss your answer and rationale. (Support your answers with the relevant Australian Accounting Standards and Australian Auditing Standards as well as published Peer-reviewed Academic Journals and Articles.)