One of the big complaints about AS2 was about the way it defined materiality. It's "more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected" resulted in rigidly conservative approaches by audit firms. One that has been disavowed now. Many were expecting AS5 [1] to weigh on this and provide just a bit more guidance. They got their wish to an extent. The "remote" language is now a "reasonable possibility." But the issue for some is how to define materiality in terms of a percent of pre-tax earnings. That has never been defined, and some find that vexing [2]. So what to do. One might just adopt the long standing convention of assuming that 5 percent is the magic number. This was proposed by the Committee on Capital Markets Regulations. In the absence of specific guidance, it's as good as any other number.  

- here's an article [3] from CFO.com