Commentary on auditing high-uncertainty fair value estimates
Document Type
Article
Publication Date
2-1-2012
Abstract
This commentary addresses challenges faced by standard-setters, preparers, users, and auditors pertaining to high-uncertainty fair value estimates. We briefly describe the financial reporting environment and the difficulty of obtaining reasonable assurance for fair value estimates with high levels of inherent measurement uncertainty. We then discuss some characteristics of an effective accountability framework for fair value accounting. We propose that additional disclosures of management's historical estimation accuracy and current levels of inherent measurement uncertainty, accompanied by changes in the audit process and auditors' communications to users, offer the most practical means to address concerns about the transparency and verifiability of high-uncertainty fair value estimates.
Publication Title
Auditing
Volume
31
Issue
1
First Page
147
Last Page
155
Digital Object Identifier (DOI)
10.2308/ajpt-10172
ISSN
02780380
E-ISSN
15587991
Citation Information
Bell, & Griffin, J. B. (2012). Commentary on auditing high-uncertainty fair value estimates. Auditing : a Journal of Practice and Theory, 31(1), 147–155. https://doi.org/10.2308/ajpt-10172