The Research On The Effect Of Behaviors About Accounting Estimates Of Derivative Financial Assets On Auditors' Adjustment Decisions

Since the 1970 s,derivatives market has been developed gradually.It has become an important part of capital market.Developing and using the market reasonably can prevent future price volatility risk and improve the efficiency of the market.However,we use fair value to measure the derivative financial assets.The accounting estimate and uncertainty increase the difficulties to the audit work which may directly affect the quality of auditing work.Recently,Chinese ministry of finance promulgated the new accounting standard <fair value measurement> which makes more specific provision about the accounting estimate confirmation and information disclosures of derivative financial assets.Therefore,this new standard puts forward the higher request not only to the enterprise but also to auditors.Further,it may affect the decisions of the users of financial statements.As companies use derivatives widely and the new standard put into force,the society pay more attention to how derivative financial assets accounting estimate behaviors affect on audit adjustments.Therefore,this research explores the relationship between the related behaviors about customers' derivative financial assets fair value accounting estimates and auditors' adjustments decision.This research also explores the influencing mechanism,in order to complement the related research areas and explore some ways to improve audit quality.This research uses experimental method and uses auditors for a sample.We explore how customers' fair value confirmation and disclosure of derivative financial assets affect adjustment decisions.On this basis,this research introducing the theory of trust to explore how auditors' confidence affect the relationship between customers' fair value confirmation/disclosures of derivative financial assets and auditing adjustment decisions.What's more,we also explore how auditors' trusts affects the relationship between customers' fair value confirmation/disclosuresof derivative financial assets,confidence and auditing adjustment decisions.The results of the study are as follows:(1)The fair value confirmation of derivative financial assets has a significant influence on auditing adjustments.Compared to the low level of confirmation of the fair value of derivative financial assets,when the confirmation of the fair value is high,auditors are more likely to require clients to adjust.The behavior of fair value amount confirmation of derivative financial assets affects the trust judgment of auditors.Compared to the high level of fair value amount confirmation,when the level of fair value amount confirmation of derivative financial assets is low,auditors are more likely to trust.The auditors' trust judgments partially mediate the relationship between the behavior of confirmation of the fair value of derivative financial assets and the auditing adjustments.(2)The fair value disclosure of derivative financial assets has a significant influence on auditing adjustments.Compared to detailed information disclosures of fair value of derivative financial assets,when the disclosures are simple,auditors are more likely to require the customers to make the adjustments.The disclosures about the fair value of derivative financial assets affect the auditors' trust judgments.If the disclosures about the fair value of derivative financial assets are simple,auditors intend to give low trust judgment.The auditors' trust judgments totally mediate the relationship between the disclosures the fair value of derivative financial assets and the auditing adjustments.