Fair Value,Industry Expertise And Audit Fees

In order to conform to the international standards,China promulgated the new accounting standards in 2006,which introduced the fair value measurement,but did not give the specific use criteria.With the outbreak of the financial crisis in 2008,the use of fair value measurement had attracted much attention,in order to further standardize fair value measurement,China promulgated the "fair value measurement" standards in 2014,It redefined the fair value,and established a unified fair value measurement framework,standardized the disclosure requirements of fair value.Accordingly,the scale of China's fair value measurement of assets and liabilities have been expanding,especially in the second and third level,this leads to the subjectivity and uncertainty of fair value measurement is greatly improved,the quality of accounting report is reduced.As the main function of CPA is to issue audit opinion for accounting report,in order to improve audit quality,certified public accountants should invest a lot of time and energy,which lead to the workload of the audit and audit costs increased,finally,the accounting firm will charge higher audit fees as compensation.In addition,due to the structure of assets and liabilities of China's banking industry is unique,they own a large number of financial assets and financial liabilities,the accounting standards and auditing standards they used and its internal control structure are different from other industries.Therefore,in order to ensure the quality of the audit report,certified public accountants should have a high level of expertise in the banking industry.Because most of the literature in the past take the non-financial industries as sample,the study of the impact of audit fees based on a single variable mainly.This paper attempts to take the Chinese banking industry as a sample,discusses the impact of accounting firm's industry expertise on the relationship between fair value and audit fees,finds out the problems of the fair value audit and the industry expertise in China's banking industry,Therefore,the conclusion of this paper can improve the fair value measurement standards,establish the fair value evaluation system and operational implementation guidelines,which can adapt to our national conditions,improve the fair value auditing standards,promote accounting firms bigger and stronger,develop industry expertise,and boost the audit market compete moderately and develop orderly in the future.This paper takes the relevant data of listed banks in China in 2008-2015 as samples,references Ettredge,Xu and Yi 's audit pricing model,to research the impact of industry expertise on fair value accounting and audit fees.Among the model,The Industry Expertise(IMS)cites Zeff and Fossum(1967)industry market share method,uses industry market share as an alternative of industry expertise,meanwhile,draws lessons from the study of CAI Chun(2007),uses dummy variables to measure.This paper uses stata13 to descriptive statistics,correlation test and multiple linear regression.In the correlation test,we find that there is no collinearity between the var iables,which lays the foundation for the next linear regression.In linear regression,this paper first uses the natural logarithm of fair value assets and liabilities to measure the fair value(FV),the results show that the accounting firm's industry expertise can significantly enhance the positive correlation between fair value and audit fees,this supports the hypothesis of product differentiation.In order to further verify the hypothesis,this paper introduces the fair value assets(FVA)and fair value liabilities(FVL)into the model separately,the regression result also support the hypothesis.Finally,in order to increase the stability of the above results,make the analysis more scientific,strengthen the persuasion,this paper uses the continuous industry market share to measure industry expertise,and uses the fair value(FV),fair value assets(FVA),fair value liabilities(FVL)separately to regression model(4.2),the regression coefficient and the significance of the fair value(FV)tend to be consistent,the regression coefficient of fair value and industry expertise(FV*IMS)is further enhanced,which shows that the model has a good robustness.