Problems And Countermeasures Of Fair Value Audit

With the dramatic development of society economy, as well as people’s requirement on the quality of accounting information, the defect of history-cost-oriented gradually exposed, which affects the economic policy-makers make the right decision. In the1970s, the concept of fair value was introduced into accout, and in the1990s, it became an international hot spot of research in the accounting profession. In this trend, China began to do research on the fair value measurement, and in the late1990s some of the promulgation of the new standands put forward to the concept of fair value. Just when the fair value accounting was discussed by people,the fair value auditing has begun to arrract the experts and scholars. In the process of financial statement auditing, the CPA should gain adequate and appropriate audit evidence to make sure the fair value measurement(including the initial measurement and follow-up measurement) and disclosure in accordance with the applicable accounting standards and related accounting routines. It is mainly due to the correction of fair value measurement and full disclosure of fair value.However, in2008,the word economics suffered heavy losses from the whole world’s financial storm which created by the US’sloan crisis. The widely use of the fair value measurement will challenge the traditional audit, because it not only caused a great impact on the accounting practice, but also greatly increases the difficulty of auditing and the risk of auditing. Using the fair value measurement demand auditors to use fair value audit.We should get clear undersanding of current situation and the main problems of fair value auditing. In our country,by the actual national conditions,the promulgation of the new accounting and auditing standards is a little late. The accountants as well as the auditors are familiar with the fair value. At present,for our country,according to the insufficient degree of market economy, the imperfect standards and the qualities of accountants and auditors,the use of fair value is property abused. All of these bring a certain degree of difficulties to the application of fair value value. So, there is an urgent need to strengthen the fair value auditing, auditors are unfamiliar with the fair value audit as well. Therefore, this article combined with risk-based audit theory and foreign countries’experience on fair value audit to analyse systemly on the fair value audit theory and practice. Our study will reducing our country’s accounting information distortion, improving the quality of auditing and maintain our international ecomomic interests. Above all, we can promote the growth of our national economy fastly and healthly.This article mainly use the normative study methods and it is divided into five parts. The first part is introduction and it describes the research background, relevant literature reviews, research methods and basic frame, ect. The second part introduces fair value including the meaning of fair value,then we can know the meaning, content, features and the theoretical basis of the fair value audit. Firstly,no uniform standard of fair value audit. Secondly, it is difficult for auditor to appraise an objective evaluation of fair value audit. Thirdly,fair value measurement raises the risk of auditing. At last, fair value increase the time and cost of audit. Then we carry on a deep level analysis on these questions,summarized reasons such as theory and methods of fair value accounting is flawed, laws and regulations of fair value accounting have not improved, our CPA’s professional ability is insufficient, and the auditing source for fair value is insufficient as well,etc. The fourth part summarizes the existing problems of fair value and through drawing lessons from the United States, Britain, Japan and other foreign countries and institutions to the fair value auditing experience.Then we carry on inspirations such as improve the Fair value auditing standards, strengthening the communication with management and play of the function of the experts. Part five proposes certain countermeasures for perfecting our country’s fair value audit.Firstly, speed up the construction of fair value auditing theory framework.Secondly, perfect relevant laws and regulations. Thirdly, introduction the modern risk oriented audit idea. Forth, normative market environment,to establish a proper valuation mode.Fifth, integrating Fair value audit resources. Sixth, improvement the fair value auditing method. Seventh, improve the auditor’s professional quality and occupation moral level.