Audit Quality And The Value Relevance Of Fair Value Stratified Measurement

Fair value measurement has experienced a long process from introduction to wide application,in which fair value measurement experienced widespread controversy and constantly adjustment to satisfy the development needs of social economy.In order to balance the reliability and relevance of fair value measurement,the academic and standard-setting institutions put forward the theory of fair value hierarchy information.China's Ministry of Finance issued a document CAS39 in 2014,and required that enterprises should measure and disclose fair value information for three levels.While,whether investors have pay attention to the changes in accounting standards and use fair value hierarchy information to make investment decisions? The complexity of the fair value measurement increases the audit risk.As a part of the company's external governance mechanism,can the external audit discover the risk of misstatement of the fair value measurement and improve the value relevance of fair value hierarchy information? The impact of accounting information on investor decisions will ultimately be reflected in the stock price.If fair value hierarchy information can influence the investor's decision and reflect in the stock price,the fair value hierarchy information has value relevance.Therefore,this paper examines the value relevance of fair value hierarchy information and the influence of audit quality on it,which has important implications for investors,standard-setting institutions and listed companies.This paper firstly reviewed and summarized the domestic and foreign literatures about audit quality and the value relevance of fair value hierarchy information.Secondly,it analyzed the relationship between audit quality and the value relevance of fair value hierarchy information from two aspects: the requirements of the accounting standards and current research results.On this basis,we proposed the research hypothesis.Thirdly,after defining variables and constructing model,this paper selects the fair value information disclosed by Shanghai and Shenzhen A-share listed companies from 2007 to 2016 as the research samples to examine the value relevance of fair value hierarchy information and the influence of audit quality on it.And the conclusions are as follows:(1)There are two main factors that influence the value relevance of fair value hierarchy information: the proportion of fair value assets or liabilities and the reliability of fair value measurement;(2)Only the first two level of fair value assets are of value relevance,the third level of fair value asset and every level of fair value liabilities are not relevant;and the value relevance of fair value assets have a downward trend in each level,but the value relevance of fair value liabilities is instability of the trend to reduce;(3)High-quality audit has a significant effect on the value relevance of the first level of fair value assets.Finally,this paper put forward some Suggestions according to the conclusions.