NOTE: In answering this Question, use APA referencing style and support your answers with relevant accounting and auditing standards as well as published peer-reviewed academic journals. A minimum of 5 peer-reviewed academic journals is expected. (Hint: this is a great opportunity to utilise the University's Library Services online such as Library Search, Advance Search, eJournals and Databases such as EBSCOhost, etc.)

You are expected to support your answers with the relevant Australian Accounting Standards and Australian Auditing Standards and with authorised/published Peer-reviewed Academic Journals and Articles.

Case Background

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:

A.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)What is materiality as per the Accounting Standards and Auditing Standards?

b)Outline the qualitative and quantitative guidelines of materiality as per the Accounting Standards and Auditing Standards.

c)Before the removal of AASB 1031, how do the standards and guidelines of "materiality" influence the auditors' judgment on materiality level and material misstatements? Provide examples.

B.Post withdrawal of AASB 1031, and with supporting academic research articles in accounting/auditing research in materiality, would the removal of AASB1031 Materiality Standards:

a)harmonise/bring uniformity/homogeneity to auditors' assessment of materiality misstatements or would this bring disparity/heterogeneity to auditors' assessment of misstatements? Explain your answer.

b)What other factors or influences, if any, the removal of AASB 1031 would impact the auditors' judgment on materiality? Explain your answer.

c)What are the implications this would have on the usefulness of financial reports? Discuss your answer and rationale.