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Fair value audit guidance of public and non-public companies in response to the credit crisis.

Executive Summary

Since the credit crisis emerged in 2008, the American Institute of CPAs (AICPA) and the Public Company Accounting Oversight Board (PCAOB) have issued a variety of guidance dealing with the auditing of fair value reporting. This paper examines and discusses this recent guidance for both nonpublic corporations and public corporations. In addition, the paper includes an audit case that illustrates an auditor's testing for fair value of debt securities with Level 2 input.

In auditing non-public corporations, the AICPA issued an exposure draft of a proposed Statement on Auditing Standards (SAS), titled Auditing Accounting Estimates, Including Fair Value Accounting Estimates and Related Disclosures. If adopted, the proposed SAS would supersede SAS No. 57, Auditing Accounting Estimates, and SAS No. 101, Auditing Fair Value Measurements and Disclosures. In the proposed auditing standard, the auditor's objective is to obtain sufficient appropriate audit evidence about whether the recognition or disclosure of any accounting estimates are reasonable, and whether the related disclosures in the financial statements are adequate in the context of the applicable financial reporting framework. In addition, the auditor would need to exercise judgment to determine whether any estimates that have been identified as having high estimation uncertainty give rise to significant risks.

The second half of the paper examines fair value auditing guidance of public corporations, in particular the PCAOB's issuance of Staff Audit Practice Alert No. 4, Audit Considerations Regarding Fair Value Measurements, Disclosures, and Other-Than-Temporary Impairments. The objectives of the staff audit practice alert (Alert 4) are to inform auditors about potential implications of the FASB Staff Positions 157-4 and 115-2 on reviews of interim financial information and annual audits. Alert 4 addresses the following topics: (1) audits of financial statements, including integrated audits, (2) disclosures, and (3) auditor reporting considerations.

I. Introduction

Since the credit crisis emerged in 2008, the reliability of fair value estimates has become a major concern to investors and other interested financial statement users. The accounting profession reacted swiftly to improve the reliability of fair value estimates. The first section of this paper examines fair value auditing of non-public corporations and the recent guidance proposed by the Auditing Standards Board on the auditing of accounting estimates.

The second portion of the paper examines fair value auditing of public corporations. In that section, the recent audit guidance issued by the Public Company Oversight Board, Staff Audit Practice Alert No. 4, Audit Considerations Regarding Fair Value Measurements, Disclosures, and Other-Than-Temporary Impairments will be examined.

Lastly, the paper concludes with an audit case to illustrate an auditor's testing for fair value of debt securities with Level 2 input.

II. Fair Value Audits of Non-Public Corporations

The American Institute of Certified Public Accountants (AICPA) recently issued an exposure draft of a proposed Statement on Auditing Standards (SAS), titled Auditing Accounting Estimates, Including Fair Value Accounting Estimates and Related Disclosures. If adopted, the proposed SAS would supersede SAS No. 57, Auditing Accounting Estimates, and SAS No. 101, Auditing Fair Value Measurements and Disclosures, and would become effective for audits of financial statements for periods beginning on or after December 15, 2010. Specifically, SAS 57 and SAS 101 would be redrafted to:

* Converge their guidance with Topic 540 of the International Standards on Auditing (ISAs), which are standards issued by the International Auditing and Assurance Standards Board (IAASB) of the International Federation of Accountants (IFAC), and

* Apply the Auditing Standards Board's (ASB's) clarity drafting conventions.

The proposal would expand on how the redrafted SAS, Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement, and the redrafted SAS Performing Audit Procedures in Response to Assessed Risks and Evaluating the Audit Evidence Obtained, and other relevant SASs would be applied in relation to accounting estimates. The proposed SAS would also include requirements and guidance on misstatements of individual accounting estimates and indicators of possible management bias.

AICPA Fair Value Guidance

Consistent with the ASB strategy to converge its standards with those of the IAASB, the proposed SAS on auditing accounting estimates, including fair value accounting estimates and related disclosures, was drafted using ISA 540, Auditing Accounting Estimates, Including Fair Value Estimates and Related Disclosures, as a base. The ASB clarifies that no differences exist between the proposed SAS and ISA 540 other than the omission from the proposed SAS of two paragraphs of ISA 540 that contain requirements dealing with management representations and communications with those charged with governance, respectively. The ASB states that those requirements are or will be addressed in the proposed SAS, Written Representations, and in the recently redrafted SAS, The Auditor's Communication With Those Charged With Governance. The ASB also states that it has made changes to the language of the ISA to use terms or phrases that are more common in the United States and to tailor examples and guidance to the U.S. environment. The ASB believes that such changes will not create differences between the application of ISA 540 and the application of the proposed SAS.

Clarity of ASB Auditing Guidance. The ASB states that it is currently making a significant effort to clarify audit guidance to address concerns over the clarity, length, and complexity of the auditing standards. The ASB has established clarity drafting conventions and will revise all existing SASs, including the proposed SAS, in accordance with those conventions. The clarity drafting conventions of the ASB include:

* Establishing objectives for each of the standards

* Including a definitions section, if relevant, in each standard

* Separating requirements from application and other explanatory material

* Numbering application and other explanatory material paragraphs using an A-prefix and presenting them in a section following the requirements section

* Using formatting techniques, such as bulleted lists, to enhance readability

* Including, where appropriate, special considerations relevant to audits of smaller, less complex entities within the text of the standards

* Including, where appropriate, special considerations relevant to audits of governmental entities within the text of the standard

Changes from Existing Standards. The ASB notes that the proposed SAS would not change or expand the guidance in SAS 57 or SAS 101 in any significant respect. Consistent with ISA 540 and to reflect a more principles-based approach to standard setting, the ASB moved to application and other explanatory material, certain requirements that are duplicative of broader requirements in SAS No. 57 and SAS 101.

In the proposed standard, the AICPA notes that the auditor's objective is to obtain sufficient appropriate audit evidence about whether the recognition or disclosure of the accounting estimates are reasonable; and whether the related disclosures in the financial statements are adequate in the context of the applicable financial reporting framework.

Risk Assessment Procedures and Related Activities.

In the proposed redraft of the SAS, Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement, the proposed SAS would require the auditor to obtain an understanding of the following to provide a basis for the identification and assessment of the risks of material misstatement for accounting estimates:

* The requirements of the applicable financial reporting framework relevant to accounting estimates, including related disclosures

* How management identifies those transactions, events, and conditions that may give rise to the need for accounting estimates to be recognized or disclosed in the financial statements. In obtaining this understanding, the auditor should make inquiries of management about changes in circumstances that may give rise to new, or the need to revise existing, accounting estimates

* How management makes the accounting estimates and an understanding of the data on which they are based, including: (a) the method, including where applicable, the model, used in making the accounting estimate; (b) relevant controls; (c) whether management has used a specialist; (d) the assumptions underlying the accounting estimates; (e) whether there has been or ought to have been a change from the prior period in the methods for making the accounting estimates and, if so, why; and (f) whether, and if so how, management has assessed the effect of estimation uncertainty

The proposed SAS would also require the auditor to review the outcome of accounting estimates included in the prior period financial statements or, where applicable, their subsequent re-estimation for the purpose of the current period. The nature and extent of the auditor's review would take account of the nature of the accounting estimates and whether the information obtained from the review would be relevant to identifying and assessing risks of material misstatement of accounting estimates made in the current period financial statements.

Identifying and Assessing the Risks of Material Misstatement.

In identifying and assessing the risks of material misstatement, the proposed SAS would require the auditor to evaluate the degree of estimation uncertainty associated with an accounting estimate. The proposed SAS would require the auditor to determine whether, in the auditor's judgment, any of those accounting estimates that have been identified as having high estimation uncertainty give rise to significant risks.

Responses to the Assessed Risks of Material Misstatement

The proposed SAS would require the auditor to determine (a) whether management has appropriately applied the requirements of the applicable financial reporting framework relevant to the accounting estimate; and (b) whether the methods for making the accounting estimates are appropriate and have been applied consistently, and whether changes, if any, in accounting estimates or in the method for making them from the prior period are appropriate in the circumstances.

In responding to the assessed risks of material misstatement, the proposed SAS would require the auditor to undertake one or more of the following, taking account of the nature of the accounting estimate:

* Determine whether events occurring up to the date of the auditor's report provide audit evidence regarding the accounting estimate

* Test how management made the accounting estimate and the data on which it is based. In doing so, the proposed SAS would require the auditor to evaluate whether (a) the method of measurement used is appropriate in the circumstances; and (b) the assumptions used by management are reasonable in light of the measurement objectives of the applicable financial reporting framework

* Test the operating effectiveness of the controls over how management made the accounting estimate, together with appropriate substantive procedures

* Develop a point estimate or a range to evaluate management's point estimate. For this purpose:
  (a) if the auditor uses assumptions or methods that differ from
  management's, the proposed SAS would require the auditor to obtain an
  understanding of management's assumptions or methods sufficient to
  establish that the auditor's point estimate or range takes into
  account relevant variables and to evaluate any significant
  differences from management's point estimate; and

  (b) if the auditor concludes that it is appropriate to use a range,
  the proposed SAS would require the auditor to narrow the range, based
  on audit evidence available, until all outcomes within the range are
  considered reasonable.


In determining the matters identified above or in responding to the assessed risks of material misstatement, the proposed SAS would require the auditor to consider whether specialized skills or knowledge in relation to one or more aspects of the accounting estimates are required to obtain sufficient appropriate audit evidence.

Substantive Procedures to Respond to Significant Risks

Estimation Uncertainty. For accounting estimates that give rise to significant risks, in addition to other substantive procedures performed to meet the requirements of proposed SAS 110 Performing Audit Procedures in Response to Assessed Risks and Evaluating the Audit Evidence Obtained, the auditor would evaluate the following:

* How management has considered alternative assumptions or outcomes, and why it has rejected them, or how management has otherwise addressed estimation uncertainty in making the accounting estimate

* Whether the significant assumptions used by management are reasonable

* Management's intent to carry out specific courses of action where relevant to the reasonableness of the significant assumptions used by management or the appropriate application of the applicable financial reporting framework, and its ability to do so

If the auditor believes that management has not adequately addressed the effects of estimation uncertainty on the accounting estimates that give rise to significant risks, the proposed SAS would require the auditor, if considered necessary, to develop a range with which to evaluate the reasonableness of the accounting estimate.

Recognition and Measurement Criteria.

For accounting estimates that give rise to significant risks, the proposed SAS would require the auditor to obtain sufficient appropriate audit evidence about whether management's decision to recognize, or to not recognize, the accounting estimates in the financial statements and the selected measurement basis for the accounting estimates are in accordance with the requirements of the applicable financial reporting framework.

Evaluating the Reasonableness of Accounting Estimates and Determining Misstatements

The proposed SAS would require the auditor to evaluate, based on the audit evidence, whether the accounting estimates in the financial statements are either reasonable in the context of the applicable financial reporting framework, or are misstated.

Disclosures Related to Accounting Estimates

The proposed SAS would require the auditor to obtain sufficient appropriate audit evidence about whether the disclosures in the financial statements related to accounting estimates are in accordance with the requirements of the applicable financial reporting framework. The ASB notes that for accounting estimates that give rise to significant risks, the proposed SAS would require the auditor to evaluate the adequacy of the disclosure of their estimation uncertainty in the financial statements in the context of the applicable financial reporting framework.

Indicators of Possible Management Bias

The proposed SAS would require the auditor to review the judgments and decisions made by management in the making of accounting estimates in order to identify whether indicators of possible management bias exist. The ASB notes that indicators of possible management bias do not, themselves, constitute misstatements for the purposes of drawing conclusions on the reasonableness of individual accounting estimates.

Documentation

The proposed SAS would require the auditor to include in the audit documentation: (a) the basis for the auditor's conclusions about the reasonableness of accounting estimates and their disclosure that give rise to significant risks; and (b) indicators of possible management bias, if any.

III. Guidance for Auditing of Fair Value Reporting and Disclosure of Public Companies

The FASB issued SFAS No. 157, Fair Value Measurements, [ASC 820], which applies to all standards requiring or permitting fair value measurement, either on a recurring or nonrecurring basis. ASC 820 was intended to provide guidance on how to measure fair value, but the standard lacks guidance on when to measure fair value. ASC 820 provides a three-level disclosure hierarchy based on the reliability of the inputs used in fair value measurements.

Criticisms of Fair Value

Since ASC 820 was issued, the Credit Crisis that emerged in 2008 was partly due to unreliable or faulty asset valuations. (http://www.cfo.com/printable/article.cfm/10902771) This has resulted in the investing community, businesses and government officials questioning the reliability of valuations of the fair value of assets. In particular, many complaints centered on the use of mark-to-market accounting due to the problems in determining fair value for illiquid assets in inactive and unstable markets. In addition, there were also perceived problems with accounting rules on impairment of debt and equity securities, particularly with the treatment of "other-than-temporary impairment" (OTTI), which may have contributed to massive asset write-downs that may not have been warranted.

These concerns have caused the profession to move toward correcting the unintended consequences of mark-to-market accounting. There are several criticisms of the weak and Exhibit 1 below provides a brief summary with examples of the fair value hierarchy to underscore, in particular, Level 2 and Level 3 measurements that have occurred during the recent inactive and disorderly markets since the Credit Crisis unclear guidance in ASC 820, as originally promulgated, especially with respect to level three measurements which allowed a great deal of judgment, as well as obtaining reliable Level 2 inputs for fair value measurements during a time like the recent Credit Crisis, a time of inactive and disorderly markets. Before discussing the recent audit guidance surrounding the auditing of fair value and required disclosures, some of the recent amendments to fair value accounting treatments will be examined along with a few illustrations of the auditing of fair value.
Exhibit 1. Fair Value Levels

Level Description                         Example(s)

Level 1: Quoted prices in   A corporation's common stock actively
active markets for          traded and quoted on the NYS Exchange.
identical assets or
liabilities

Level 2: Directly or        An over-the-counter interest rate swap,
indirectly observable       valued based on a model of observable
(market-based)              inputs (LIBORforward interest rate curves)
information

                            A quoted price in a market that is not
                            active for the identical asset or liability
                            (e.g., debt securities traded in an
                            over-the market when the market for the
                            security is inactive)

Level 3: Unobservable       Goodwill or fixed asset impairments based
inputs (no market data,     on discounted cash flows projections.
inputs not correlated with
market data)


After the impact of the Credit Crisis, the FASB made significant amendments to FASB 157 (ASC 820), especially in the area of measuring fair value involving the use of observable level-2 inputs during inactive and disorderly markets. Therefore, during April 2009, the Board issued FASB Staff Position 157-4 (ASC 820-10), Determining Fair Value When the Volume and Level for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly. This guidance addressed concerns that ASC 820 lacked sufficient guidance on how to measure fair value where markets for financial assets that were previously active were no longer active. A great deal of concern focused on the extent that too great an emphasis was being placed on last transaction prices or quoted prices as the sole determinant of fair value. As such, these observable inputs may not be the most reliable estimate of fair value if such inputs are not current, relevant, require significant costs to obtain. FSP 157-4 does not alter the objective of fair value measurement. It states that "fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction (that is, not a forced sale or distressed sale) between market participants at the measurement date under current market conditions."

The guidance in FSP 157-4 emphasizes the determination of fair value when the volume and level of market activity has significantly declined, identifying transactions that are not orderly and the use of significant judgment by management. However, FSP 157-4 provides additional guidance by allowing entities to look beyond the last transaction or sale price previously used to develop a fair value measurement by enabling management to exercise judgment in considering those market factors that may warrant adjustment to the transaction or quoted price of the asset or liability. Also, ASC 820-10 does not provide a specific methodology for making a fair value estimate but allows three valuation approaches discussed in FASB 157: market, income and cost approaches. FSP 157-4 indicates that when there is a significant decrease in volume or level of activity, the valuation method used may need to be changed or multiple methodologies may be required.

The guidance for measuring fair value under FASB 157 as amended by FSP 157-4 allows for the use of even more refined management judgment in the measurement process, which of course raises additional auditing issues. Therefore, the PCAOB continues to issue audit guidance to help clarify how fair value measurements should be presented and audited.

PCAOB Staff Audit Practice Alert No. 4: Fair Value Audit Considerations

On April 21, 2009, the PCAOB issued Staff Audit Practice Alert No. 4, Audit Considerations Regarding Fair Value Measurements, Disclosures, and Other-Than-Temporary Impairments, which was issued immediately following FSP 157-4 and "highlights new, emerging, or otherwise noteworthy circumstances that may affect how auditors conduct audits under the existing requirements of PCAOB standards and relevant laws." The practice alert addressed the implications of FSP 157-4 as well as re-emphasized existing requirements. The objectives of the staff audit practice alert (Alert 4) are to inform auditors about potential implications of the FSPs on reviews of interim financial information and annual audits. Alert 4 addresses the following topics discussed below: (1) audits of financial statements, including integrated audits, (2) disclosures and (3) auditor reporting considerations.

Audits of Financial Statements

As mentioned above, FSP 157-4 provides additional guidance for estimating fair value in situations where the volume and level of activity for an asset or liability have significantly decreased. Therefore, in performing audit engagements involving fair value determination, auditors must perform the following:

1. Obtain an understanding of the company's process for determining fair value measurements and disclosures and of the relevant controls sufficient to assess the risk of material misstatement (AU [section][section] 328.09 and 328.13).

2. Perform planned audit procedures (depending on the nature, timing and extent of the wide range of possible fair value possibilities and varying levels of risk of material misstatement), the auditor's substantive tests of the fair value may involve:

a. Testing management's significant assumptions, the valuation model the underlying data,

b. Developing independent fair value estimates for corroborative purposes, or

c. Reviewing subsequent events and transactions.

Note that in April 2009 FSP Nos. FSP 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments, was also issued to amend the guidance for recognizing an "other-than-temporary impairment" (OTTI) of a debt security investment. Alert 4 requires the auditor to evaluate a company's conclusions concerning the need to recognize an impairment loss. If a company records an impairment loss, the auditor should gather evidence supporting the amount of the impairment recorded to determine if the company has appropriately followed GAAP. In addition, if a company is required to separate the amount of the OTTI that represents credit losses from the amount representing other factors. Alert 4 indicates that the auditor should obtain sufficient competent evidence to provide a reasonable assurance that the estimates are reasonable in the circumstances and are properly presented and disclosed in conformity with GAAP. In addition, the auditor should obtain an understanding of how such estimates were developed.

Disclosures

FSP 157-4 requires additional disclosures regarding fair value measurements. Specifically, the Staff Position requires companies to disclose changes in valuation techniques and related inputs for fair value measurements in interim and annual periods and to provide additional disclosures required under ASC 820. FSP 115-2 requires companies to disclose any information that assists users to understand the reasons for the portion of OTTI that was not recognized in earnings, as well as the methodology and significant inputs used to determine the portion of OTTI recognized in earnings. Auditors should evaluate such disclosures to insure they are in accordance with FAS 115-2.

In Alert 4, the auditor should read the other information accompanying interim and annual financial statements contained in reports filed with the SEC. Specifically, the auditor should determine if the Management's Discussion and Analysis of Financial Condition and Results of Operations section of annual reports and other filings that include discussions regarding fair value measurements and OTTI are materially inconsistent with the financial statement. If the auditor concludes the existence of a material inconsistency, or becomes aware of a material misstatement of fact, the auditor should determine if the financial statements, the audit report, or both require revision. However, if the auditor concludes that the financial statements or audit report do not require revision, the auditor should request the company to revise the other information.

Auditor Reporting Consideration

FSP 157-4 states that revisions resulting from a change in a valuation technique or its application are required to be accounted for as a change in accounting estimate. In the period of adoption, entities are required to disclose any change in valuation technique and related inputs, and to quantify the total effect by major category. In addition, FSP 115-2 requires the company to recognize the cumulative effect of initially applying the Staff Position as an adjustment to the opening balance of retained earnings, as of the beginning of the period in which FSP 115-2 is adopted, with a corresponding adjustment to accumulated other comprehensive income.

The auditor should evaluate whether the company's accounting for and disclosure of the changes are in accordance with the Staff Positions. Alert 4 also indicates the need to identify consistency matters that might affect the auditor's report. Moreover, the auditor should evaluate whether the comparability of the financial statements between periods has been materially affected by changes in accounting principles. If a change in accounting principle has a material effect on the financial statements, it should be recognized in the auditor's report through the addition of an explanatory paragraph following the opinion paragraph.

IV. Illustration of Fair Value Auditing

In this last section, an illustration of fair value auditing is provided. This illustration provides an audit example of fair value of available-for-sale debt securities.

Illustration: Auditor Testing For Fair Value of Debt Securities (with Level 2 Input)

Example: On December 31, 2009, your client holds in its Investment Securities Available-for-Sale (A-F-S) account, $30 million face value of a publicly issued corporate bond maturing in 20 years. The security was purchased at par through an underwriting that took place on October 1, 2009. The bond issuer has a debt rating of Baa from Moody's and BBB from Standard & Poors, the minimum investment rating to qualify as investment grade. The client reports the fair value of the security at $31 million along with a credit to Other Comprehensive Income of $1 million. There have been no trades in the preceding 20 days by any holder of this bond ($1.2 billion of these bonds are outstanding). As support for its fair value determination, the client has stated that:

1. Last sale of this bond by another holder was 20 days ago at the same price your client proposes to use at December 31.

2. There has been no change in the credit rating of the issuer since the offering date.

3. The amount of the bond held by your client represents only 1% of total client assets of $3 billion.

Auditor's Concerns:

1. Client holding represents 2.5% (30 million/1.2 billion) of the entire bond issue outstanding. There is liquidity risk of whether the client can receive the same price for all shares in a forced sale.

2. There could have been a change in market conditions over the last 20 days of the month, resulting in either an increase or decline in the value of this bond.

3. Client has not been able to identify a more recent sale of another security of similar credit rating and maturity to substantiate its pricing.

4. Client is unable to identify either a broker or market maker who can independently verify client's calculation of fair value.

Audit Procedures:

1. This is a "Level 2" valuation under SFAS 157. The auditor identifies three other securities with similar maturity, credit rating, issue date and coupon interest rate, which it uses as "proxy securities." Each of these securities had been actively traded on December 31, 2009.

2. For those proxy securities, the auditor identifies:

a. Prices at December 31, 2009 based on actual trades (an average of the three prices is used)

b. The amount of price change in the proxy securities in the last 20 business days (assume here that the percentage of price change is consistent with the price change in the client bond from last trade date to December 31, 2009)

3. Since average daily volume for the bond during the first three months of trading is less than the client's holdings, a liquidity reserve of 3% of face value is agreed with the client to be appropriate. This reserve is also agreed to by the client's independent Market Risk Group that reports to the corporate CFO.

4. Auditor researches the change in the last 20 days in December in spreads between U.S. Treasury securities of similar maturity and corporate bonds of similar credit rating, and concludes there has not been significant movement.

5. Auditor determines that there is minimal concentration risk in the client's holding as other investments in the Available-for-Sale account are well diversified across asset classes, so no pricing reserve for concentration risk is necessary.

Conclusion: The client reduces the fair value amount by $900 thousand (3% of $30 million) to reflect the liquidity risk in holding such a significant portion of the security issue. This reduces the carrying value to $30,100,000, and the credit to Other Comprehensive Income becomes $100,000. Auditor is now able to conclude that the balance carried at fair value in the A-F-S account is fairly stated at December 31, 2009.

V. Conclusion

The credit crisis has placed a higher burden on fair value reporting in financial statements, particularly Level 2 and Level 3 transactions. The FASB issued guidance for using judgment in estimating fair value (FSP 157-4 and FSP 115-2) and in response, both auditing standards boards issued audit guidance dealing with the auditing of accounting estimates. For non-public corporations, in the AlCPA's exposure draft of a proposed Statement on Auditing Standards (SAS), Auditing Accounting Estimates, Including Fair Value Accounting Estimates and Related Disclosures, the auditor's objective is to obtain sufficient appropriate audit evidence about whether the recognition or disclosure of the accounting estimates are reasonable; and whether the related disclosures in the financial statements are adequate in the context of the applicable financial reporting framework. For public corporations, the Public Company Accounting Oversight Board issued Staff Audit Practice Alert No. 4, Audit Considerations Regarding Fair Value Measurements, Disclosures, and Other-Than-Temporary Impairments, and addressed the implications of FSP 157-4, which informs auditors about potential implications of the FSPs on reviews of interim financial information and annual audits. These additional steps taken by the accounting profession and the guidance to enhance the attestation function will hopefully improve fair value reporting.

References

American Institute of Certified Public Accountants. 2009. Statement of Auditing Standards, Exposure Draft, Auditing Accounting Estimates, Including Fair Value Accounting Estimates and Related Disclosures. Jersey City, NJ.

--. 1989. Statement of Auditing Standards No. 57, Auditing Accounting Estimates. Jersey City, NJ.

--. 2003. Statement of Auditing Standards No. 101, Auditing Fair Value Measurements and Disclosures. Jersey City, NJ.

--. 2006. Statement of Auditing Standards No. 110, Performing Audit Procedures in Response to Assessed Risks and Evaluating the Audit Evidence Obtained. Jersey City, NJ.

Financial Accounting Standards Board. 2006. Statement of Financial Accounting Standards No. 157, Fair Value Measurements. FASB, Norwalk, CT.

--. 2009. FASB Staff Position FAS 115-2, Recognition and Presentation of Other-Than-Temporary Impairments. FASB, Norwalk, CT.

--. 2009. FASB Staff Position FAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly. FASB, Norwalk, CT.

Johnson, S. 2008 (March 19). The Fair-Value Blame Game. CFO.com--Available at http://www.cfo.com/article.cfm/10902771?f=search

Adrian P. Fitzsimons, The Peter J. Tobin College of Business, St. John's University

fitzsima@stjohns.edu

Jeffrey L. Satenstein, Queens College of the City University of New York

jeffrey.satenstein@qc.cuny.edu

Benjamin R. Silliman, The Peter J. Tobin College of Business, St. John's University

sillimab@stjohns.edu
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Author:Fitzsimons, Adrian P.; Satenstein, Jeffrey L.; Silliman, Benjamin R.
Publication:Review of Business
Geographic Code:1USA
Date:Mar 22, 2010
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