Auditor Industry Expertise,Fair Value Measurement Level And Earnings Management

As China's reform and opening up accelerated,various financial products and derivative financial products have emerged in the capital market.The dominant position of the historical cost measurement model is in jeopardy.The call to introduce fair value measurement attributes is coming.The larger the historical cost measurement model and the fair value measurement model are,the inevitable result.On the way to the exploration of fair value accounting,China and international accounting standards have remained the same.In 2014,China's Ministry of Finance issued a corporate accounting standard for the use of fair.value-the fair value standard No.39,marking the beginning of promotion and use in China.Fair value.However,compared with foreign mature capital markets,China's capital market is not yet mature,and the accounting standards are not perfect for fair value.Therefore,in the process of widely applying fair value measurement,there are many problems,Such as using fair value manipulation.The phenomenon of profit is not uncommon.Auditors with industry expertise can narrow the space for earnings management.However,China's auditor industry expertise started late and development is not yet mature,so auditor industry expertise can significantly reduce fair value measurement for earnings management.The positive relationship is not clear.First of all this paper sorts out relevant literatures on fair value and earnings management and the relationship between auditor industry expertise and earnings management.Then,this paper gives an overview of the definitions of fair value auditor industry expertise and earnings management,and introduces the theoretical basis on which this paper is based.Then this article roughly combs the application process of fair value accounting in China.Under the support of the above theoretical basis,this paper takes the financial listed companies from 2007 to 2017 as the research object,and verifies the relationship between fair value measurement and earnings management by manually collecting the fair value measurement level data,and further tests the auditor industry.The regulatory effect of the expertise on the relationship between the two is expected to provide limited empirical evidence for scholars who intend to study this issue.After empirically verifying the above problems,it is found that the higher the proportion of fair value measurement assets and liabilities,the greater the degree of earnings management of listed companies;the third level of fair value measurement is the positive of earnings management based on the first and second levels of fair value measurement.The impact is even greater Explain that fair value measurement has greater uncertainty,subjectivity and arbitrariness,which largely depends on the discretion of management,and the third level of fair value measurement relative to the first and second levels of fair value measurement.More complex,the results are more difficult to verily and more easily manipulated by management.Further research found that auditor industry expertise can not effectively inhibit listed companies' use of fair value measurement for earnings management.It shows that the current development level of China's auditor industry expertise is relatively]ow,and the overall independence of accounting firms is relatively low,which has strong dependence on the industry and is susceptible to it.According to the results of empirical tests,this paper proposes three policy recommendations:First,further improve the fair value accounting standards,and continuously refine the fair value application guide Second,furthier improve the fair value auditing standards and continuously strengthen the quality of fair value auditing.Third,further develop the auditor industry expertise and continuously improve professional judgment.The conclusions of this paper expand the economic consequences of the implementation of fair value accounting standards and the earnings management literature.The proposed policy recommendations have important reference significance for the improvement of China's fair value accounting standards and the further encouragement of accounting firms to become bigger and stronger.