The Fair Value Measurement And The Audit Market Efficiency Study

As a new model measurement , Fair value is being used extensively at home and abroad. In order to strengthen harmonization and convergence between Chinese accounting standards and International Financial Reporting Standards(IFRS),Accounting Standard for Business Enterprises promulgated in 2006 by Chinese Ministry of Finance adopted fair value measurement on a large scale. According to expert statistics, The system of accounting standards for business enterprises are composed of one basic standards and 38 specific standards, of which 35, about 90% of the accounting standards, use the fair value or present value of the measurement directly or indirectly, and many standards are used to modified fair value and present value of the measurement and disclosure. On the other hand, even though China issued the "China Institute of Certified Public Accountants Auditing Standards No. 1322 - fair value measurement and disclosure", which modified the fair value audit. However, the extent of the fair value measurement impacted market efficiency of audit, which there are few scholars engaged in.Under the background of fair value measurement coming into the general trend, the dissertation focuses on the following issues on fair accounting and market efficiency of audit based on overseas and domestic research results. In the part, this dissertation tries to presume the audit market efficiency will descend in the early time when fair value measurement coming. The dissertation examines the hypothesis by collecting all of annual reports in shanghai Exchange, and provides some important findings as follows:1. Findings show that there are not a significant relation with fair value and earnings management for EXBI, however, we do find a significantly higher level of earnings management for BTL. In a word, there are a higher level about the impact of fair value measurement on. 2. Frankly speaking, the behavior of earnings management are objective phenomenon ,and the existence of earnings management is opportunistic behavior management information in the financial performance. the purpose of audit is to gloss over constraints of opportunistic behavior of financial information. Audit efficiency mainly depends on the level of earnings Management degree, the higher the degree of earnings management, and the cost of auditing are higher. That is to say, the auditor who bear the more risk, and audit efficiency lower. In contrast, the lower the degree of earnings management, the audit will be higher efficiency. Therefore, To some extent, the impact of fair value on earnings management eventually led to changes in market efficiency audit.3. In this paper, the analysis showed that the impact of the fair value on earnings management are on the rise, and earnings management affect audit quality, the descend of audit quality led to downward trend of market efficiency.In summary, the results of this study show that the introduction of fair value in the early stages affect the audit market efficiency in a certain extent. Those empirical findings not only help us understand market economical implication of the application of fair value measurement in audit market , and will help deepen their understanding of market efficiency audit, to further enrich the theoretical study of the audit, but also for China's listed companies to increase self-restraint mechanisms ,to improve the registration of the accounting profession ,to improve audit quality and the government supervision mechanism ,which have important the theoretical and practical value in china.