Case Study: Case Background In February 2012, the Australian Accounting Standards Board 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: Before the withdrawal of AASB 1031 and with reference to the AASB 1031 Materiality (issued by the Australian Accounting Standards Board, i.e. AASB issued by AASB) and the ASA 240 The Auditor`s Responsibility to Consider Fraud in an Audit of Financial Report, ASA315 Identifying and Assessing the Risks of Material Misstatements through Understanding the Entity and its Environment, 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, i.e. ASA issued by AUASB): What is materiality as per the Accounting Standards (AASB) and Auditing Standards (ASA)? Outline the qualitative and quantitative guidelines of materiality as per the Accounting Standards (AASB) and Auditing Standards (ASA). How do the standards and guidelines of "materiality" influence the auditors` judgment on materiality level and material misstatements? Provide examples. Do you agree with the Australian Accounting Standards Board`s decision to withdraw the AASB 1031 Materiality Standard? Why or why not?