O'Reilly logo

The Professional's Guide to Fair Value: The Future of Financial Reporting by James P. Catty

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

15

The Auditor's Blessing

Facts and truth don't have much to do with each other.

—William Faulkner (1897–1962), American author

NOW WE COME TO THE LAST CHAPTER, dealing with the role of the auditor in blessing all the estimates of fair value found in a set of financial statements. Those amounts involve all kinds of assets and many types of markets, ranging from the most liquid, such as U.S. Treasury bills, notes, or bonds, to the merely notional, composed of potential market participants. My comments draw on several documents from the organizations creating the standards that govern audit procedures; they are the International Federation of Accountants, which issues the International Standards on Auditing (ISA) and the American Institute of Certified Public Accountants, the source of (U.S.) Statements on Auditing Standards (SAS). Under the standards, auditors are expected to be aware of, and completely understand, the principles and rules relating to the measurement, accounting, and disclosure of fair values, which are of growing importance in many financial reporting frameworks.

Credit crunches and reduced market liquidity during the recent Great Recession (2008–) have highlighted the difficulties that arise in valuing assets, especially financial instruments, when suitable information either is not available or is difficult to obtain. Many national and international regulatory and other organizations have tried to assist users, preparers, and auditors of financial statements ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required