Fair value measurement and its impact on audit fees: evidence in the Brazilian market

Authors

DOI:

https://doi.org/10.21680/2176-9036.2021v13n2ID25719

Keywords:

Fair value; Audit fees; Monitoring costs.

Abstract

Objective: The purpose is to verify the impact of using the measurement at fair value on the audit fees, differentiating even the period before and after the adoption of IFRS 13 (CPC 46).

 Methodology: The research is quantitative, for testing the hypothesis raised, the multiple regression technique was used, with data available from companies listed in B3 for the period between 2010 and 2016.

 Results: The evidence indicates that the complexity and subjectivity of fair value is recognized by the audit firms, that is, audit firms recognize that fair value measurement implies more effort and that the associated audit risk rises, leading firms to charge of a risk premium for the provision of the service. However, it was not possible to confirm that auditors' fees increased after the adoption of IFRS13 (CPC 46).

 Contributions of study: Theoretical/methodological - The study contributes to understanding the impacts of adopting international accounting standards, in this specific case on audit fees. Social/management - Given the evidence that there is a higher audit cost associated with the greater complexity of information in a fair value environment, companies can develop mechanisms to minimize the uncertainty of the information to be audited.

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Author Biographies

Edson Vinícius Pontes Bastos, Universidade Federal do Rio de Janeiro (UFRJ)

PhD student in Production Engineering.

Luciana Holtz, Universidade Federal de Juiz de Fora (UFJF)

Doctor in Accounting.

Odilanei Morais dos Santos, Universidade Federal do Rio de Janeiro (UFRJ)

Doctor in Accounting.

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Published

02-07-2021

How to Cite

BASTOS, E. V. P. .; HOLTZ, L. .; SANTOS, O. M. dos . . Fair value measurement and its impact on audit fees: evidence in the Brazilian market. REVISTA AMBIENTE CONTÁBIL - Universidade Federal do Rio Grande do Norte, [S. l.], v. 13, n. 2, 2021. DOI: 10.21680/2176-9036.2021v13n2ID25719. Disponível em: https://periodicos.ufrn.br/ambiente/article/view/25719. Acesso em: 3 jul. 2024.

Issue

Vol. 13 No. 2 (2021): Jul./Dez.

Section

Section 7: International (S7)

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