The Research Oil Audit Issues Of Fair Value Measurements And Disclosures

Fair value accounting has become the mainstream of accounting development.But if there is no fair value measurements and disclosures auditing (referred to asfair value auditing), fair value accounting will ring hollow. In recent decades, aseries fair value auditing standards at home and abroad were issued, but auditingtheorists and practitioners know little about, and even misunderstand fair valueauditing, so it urgently needs in-depth study.On the basis of the results of previous research, taking the fair value informationin2011annual financial reports of CITIC Securities Company Limited for example，this paper comprehensively summarizes and explains the common auditing processesand techniques of fair value measurements and disclosures in related auditingstandards at home and abroad, including: risk assessment procedures and relatedactivities, identifying and assessing the risks of material misstatement, responses tothe assessed risks of material misstatement, further substantive procedures to respondto significant risks, evaluating the reasonableness of the fair value and determiningmisstatements, evaluating the adequacy of fair value disclosures, identifying theindicators of possible management bias and others. This paper also sums up anddetails the four difficulties of fair value auditing, including: reasonable response tothe estimate uncertainty and its influence, identifying and evaluating the managementbias and its influence, evaluating the reasonableness of valuations models andassumptions, and forming a point or range estimation, and gives correspondingsuggestions. Finally, this paper analyzes the problems faced by China in fair valueauditing and puts forward improvement measures: training highly qualified fair valueauditors; perfecting the market environment; perfecting the basis of preparingfinancial reporting related to fair value; perfecting fair value auditing standards.This paper innovatively elaborates the processes and techniques of fair valueauditing in the form of case studies, summarizes audit difficulties in fair valueauditing and puts forward corresponding countermeasures, and has great theoreticalsignificance and practical value.