In February 2012, the Australian Accounting Standards Boards decided at its meeting to propose the withdrawal ofAASB 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 theIASB Conceptual Framework.

The major impact of the withdrawal ofAASB 1031is the removal of thespecific quantitative guidance for materiality. The withdrawal ofAASB 1031became effective to annual reporting beginning on or after 1 July 2015.

Required:

1. Summarize the significant changes and impact on financial reporting withAASB 1031 Materiality(issued by the Australian Accounting Standards Boards - AASB) from 1995 to 2015. (8 Marks)

You can present your answer using a table format:

Year/Years or Time period

Changes inAASB1031 MaterialityStandard

Impact on financial reporting

2.Priorto the withdrawal ofAASB 1031and with reference to theAASB 1031 Materiality(issued by the Australian Accounting Standards Boards - AASB) and theASA 320 Materiality in Planning and Performing an AuditandASA 450 Evaluation of Misstatements Identified during an Audit(issued by the Auditing and Assurance Standards Board-AUASB), (12 Marks):

1. Define materiality.
2. Outline thequalitativeandquantitativeguidelines of materiality.
3. How the constructs of "materiality" influence the auditors' professional judgment on
4. misstatements?

Asia Pacific College of Business & Law Semester 2 2020 Page9of10

3.Postwithdrawal ofAASB 1031, would this withdrawal ofAASB1031 MaterialityStandards:

1. harmonise/bring uniformity to auditors' assessment of materiality misstatements or would this
2. bring disparity to auditors' assessment of misstatements?Why so?
3. What other influence, if any,this would bring to the auditors' judgment on misstatementsand
4. 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 authorised/published Peer-reviewed Academic Journals and Articles.)