The Impact of Fair Value Measurement on Audit Fees: Evidence from Financial Institutions in 24 European Countries

2016 ◽  
Vol 20 (3) ◽  
pp. 255-266 ◽  
Author(s):  
Irina Alexeyeva ◽  
Margarita Mejia-Likosova
Keyword(s):  
Financial Institutions ◽  
Audit Fees ◽  
Fair Value ◽  
European Countries ◽  
Fair Value Measurement ◽  
Value Measurement ◽  
The Impact

scholarly journals Fair value measurement and its impact on audit fees: evidence in the Brazilian market

2021 ◽  
Vol 13 (2) ◽  
Author(s):  
Edson Vinícius Pontes Bastos ◽  
Luciana Holtz ◽  
Odilanei Morais dos Santos
Keyword(s):  
Risk Premium ◽  
Audit Fees ◽  
Fair Value ◽  
Audit Risk ◽  
Audit Firms ◽  
Fair Value Measurement ◽  
Before And After ◽  
Multiple Regression Technique ◽  
Value Measurement ◽  
The Impact

Objective: The purpose is to verify the impact of using the measurement at fair value on the audit fees, differentiating even the period before and after the adoption of IFRS 13 (CPC 46).  Methodology: The research is quantitative, for testing the hypothesis raised, the multiple regression technique was used, with data available from companies listed in B3 for the period between 2010 and 2016.  Results: The evidence indicates that the complexity and subjectivity of fair value is recognized by the audit firms, that is, audit firms recognize that fair value measurement implies more effort and that the associated audit risk rises, leading firms to charge of a risk premium for the provision of the service. However, it was not possible to confirm that auditors' fees increased after the adoption of IFRS13 (CPC 46).  Contributions of study: Theoretical/methodological - The study contributes to understanding the impacts of adopting international accounting standards, in this specific case on audit fees. Social/management - Given the evidence that there is a higher audit cost associated with the greater complexity of information in a fair value environment, companies can develop mechanisms to minimize the uncertainty of the information to be audited.

The Impact of Fair Value Measurement for Bank Assets on Information Asymmetry and the Moderating Effect of Own Credit Risk Gains and Losses

2018 ◽  
Vol 93 (6) ◽  
pp. 127-147 ◽  
Author(s):  
Joana C. Fontes ◽  
Argyro Panaretou ◽  
Kenneth V. Peasnell
Keyword(s):  
Credit Risk ◽  
Information Asymmetry ◽  
Fair Value ◽  
Data Availability ◽  
Bid Ask Spread ◽  
Fair Value Measurement ◽  
Gains And Losses ◽  
Value Measurement ◽  
The Impact

ABSTRACT We examine whether the use of fair value measurement (FVM) for bank assets reduces information asymmetry among equity investors (bid-ask spread) and how this is affected by the recognition of own credit risk gains and losses (OCR). Our findings show that FVM of assets is associated with noticeably lower information asymmetry, and that this reduction is more than twice as large when banks also recognize OCR. In addition, we find that the bid-ask spread is incrementally lower for banks that provide more detailed narrative disclosures on OCR. The findings also indicate that the effects of asset FVM and OCR recognition on the bid-ask spread do not simply capture the differences in the characteristics of the banks and the quality of their information environments. Data Availability: All data are available from public sources.

scholarly journals The impact of legal efficacy on value relevance of the three-level fair value measurement hierarchy

2020 ◽  
Vol 59 ◽  
pp. 101259 ◽  
Author(s):  
Lin Liao ◽  
Daifei (Troy) Yao ◽  
Helen Kang ◽  
Richard D. Morris
Keyword(s):  
Value Relevance ◽  
Fair Value ◽  
Fair Value Measurement ◽  
Value Measurement ◽  
The Impact

Content and context: “fair” values in China

2017 ◽  
Vol 30 (2) ◽  
pp. 352-377 ◽  
Author(s):  
Ferdinand Balfoort ◽  
Rachel Francis Baskerville ◽  
Rolf Uwe Fülbier
Keyword(s):  
Financial Reporting ◽  
Fair Value ◽  
Governance Structure ◽  
Future Research ◽  
Content Type ◽  
Financial Reporting Standards ◽  
Fair Value Measurement ◽  
Western Market ◽  
Value Measurement ◽  
The Impact

Purpose The evolution of International Financial Reporting Standards (IFRS) was nurtured by economists and accountants loyal to the philosophical basis of what is often referred to as “Western” market economies, being classical and neoclassical contracting theories. The purpose of this paper is to illustrate how a particular Asian cultural attribute (guānxì ) impacts on the efficacy of fair value measurement. Design/methodology/approach Using a literature review and research of studies of the adoption of IFRS in China, studies of both guānxì and fair value in Chinese accounting research, this study unbundles Williamson’s governance structure and contracting theory to examine how guānxì is positioned orthogonally to fair value (market-oriented valuation) principles for financial reporting. This is followed by a case study of the events surrounding the collapse of China Medical Technologies. Findings Guānxì is integral to Asian economies and economic transactions. Resulting conditions, characterised by relational contracting, may not meet the qualitative characteristics of neutrality and faithful representation in fair value measurement of assets and liabilities. The same may be true when insider or “trusted party transaction” values prevail for large ticket transactions among entities in any jurisdiction. Research limitations/implications Future research on the impact of guānxì may be constrained by its often hidden, and yet dynamic, character; and the varieties of its manifestations. Originality/value This study highlights how difficult it may be to achieve both comparability and relevance in the asset and liability recognition and measurement rules in Asian (and possibly also other) economies adopting accounting principles that are developed in a Western context.

scholarly journals The Critical Aspect on Fair Value Accounting and its Implication to Islamic Financial Institutions

2015 ◽  
Vol 1 (3) ◽  
pp. 210
Author(s):  
Safri Haliding
Keyword(s):  
Financial Institutions ◽  
Financial Reporting ◽  
Financial Institution ◽  
Accounting Standards ◽  
Fair Value ◽  
Fair Value Accounting ◽  
Fair Value Measurement ◽  
Islamic Financial Institutions ◽  
Value Measurement ◽  
Critical Aspects

Recently, fair value measurement and its implication in accounting standards have been increasing (Ramanna, 2006). One of the important aspects of financial reporting is measurement (Barth, 2007). Barlev and Haddad (2003) state that the fair value accounting(FVA) paradigm replaced the historical cost accounting (HCA) in the development of accounting standards that FVA is more value relevant that HCA probably did not provide the real financial information and income. However, previously studies mention that fair value accounting suffers from some serious limitations and disadvantages such as issues in market approach, income approach, and cost approach. Al-Yassen and Al-Khadash (2011) argue that accounting standard setters such as the International Accounting Standards Board (IASB) UK and the Financial Accounting Standards Board (FASB) U.S as well as other national accountingstandard setters provide high attention and long-term ambition to use fair value accounting as full measurement in all financial instruments. Islamic Financial Institutions (IFIs) that have different objectives and principles as well as have different financial products with conventional financial institution. This paper tries to explore critical aspects of the fair value accounting andits implications to Islamic Financial Institutions implications. This study concludes that that fair value accounting measurement provides many critical aspects to be implemented to Islamic Financial Institutions (IFIs). Additionally, AAOIFI proposed cash equivalent value as respond to fair value measurement that cash equivalent value when the attribute condition are present such as the relevance, reliability and understandability of the resulting information. Furthermore, fully adopting International Financial Reporting Standards (IFRS) issued by IFRSIASB, there will no specific standards for unique functions of Islamic Financial Institutions. Inaddition, the paper may be recommended to work together among Muslim countries to unity the potential harmonizing one set accounting standards for Islamic Financial Institutions such as AAOIFI?s standards.

The Relevance of the Fair Value Measurement Hierarchy: A Holistic Perspective

2019 ◽  
Author(s):  
Andrei Filip ◽  
Ahmad Hammami ◽  
Zhongwei Huang ◽  
Anne Jeny ◽  
Michel Magnan ◽  
...  
Keyword(s):  
Fair Value ◽  
Holistic Perspective ◽  
Fair Value Measurement ◽  
Value Measurement
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