Auditing fair value estimates under IFRS 13

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dc.contributor Aalto-yliopisto fi
dc.contributor Aalto University en Fang, Allen 2015-04-02T12:47:27Z 2015-04-02T12:47:27Z 2015
dc.description.abstract RESEARCH OBJECTIVES: The aim of this study was to investigate how do auditors attain the necessary assurance regarding fair value estimates. Audit risks concerning fair value estimates, the auditors' response to address those risks and specifically how do auditors cope with the challenges of verifiability, uncertainty and management bias in their audit work were all of particular interest. This study also examined how the new IFRS 13 fair value measurement standard would possibly impact the current practice of auditing fair values. METHODOLOGY: This study was done using qualitative interviews. Data was gathered by interviewing 5 auditors working for Big 4 audit firms (2 partners and 3 senior managers). Each respondent had at least 9 years of experience in auditing fair value estimates under IFRS. The interview was structured into two themes, and they were all recorded and extracted into writing. RESULTS: The primary audit risks concerning fair value estimates were accuracy, completeness, valuation and management override of controls. Internal control testing was considered only for items whose measurement process is either automated or is largely based on observable inputs. For estimates measured using unobservable inputs, auditors rely mainly on substantive testing, with substantive analytical procedures being most common. The auditors conduct the procedure by forming their own understanding on what the estimate should be by benchmarking the key inputs used behind the measurement against market data and actively using valuation experts. The new IFRS 13 standard did not have any major impact on auditing fair value. The minor impacts were simplifying the auditors work when looking for guidance and easing the argumentation process with the client. The standard's new disclosure requirements could help to shift part of the risk and responsibility concerning the estimates to the readers and users of the financial statement. en
dc.format.extent 84
dc.language.iso en en
dc.title Auditing fair value estimates under IFRS 13 en
dc.type G2 Pro gradu, diplomityö fi Kauppakorkeakoulu fi School of Business en
dc.contributor.department Laskentatoimen laitos fi
dc.contributor.department Department of Accounting en
dc.subject.keyword Fair value
dc.subject.keyword IFRS
dc.subject.keyword Auditing
dc.subject.keyword käypä arvo
dc.subject.keyword tilintarkastus
dc.identifier.urn URN:NBN:fi:aalto-201504032157
dc.type.dcmitype text en
dc.programme.major Accounting en
dc.programme.major Laskentatoimi fi
dc.type.ontasot Master's thesis en
dc.type.ontasot Pro gradu tutkielma fi
dc.subject.helecon laskentatoimi
dc.subject.helecon accounting
dc.subject.helecon tilintarkastus
dc.subject.helecon auditing
dc.subject.helecon standardit
dc.subject.helecon standards
dc.subject.helecon käypä arvo
dc.subject.helecon fair value
dc.ethesisid 13912 2015-02-11
dc.location P1 I

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