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The Perception of Auditors in the Measurement of Instruments Financial Institutions at Fair Value in Financial Institutions

Author

Listed:
  • Paulo Cesar de Melo Mendes

    (Universidade de Brasília)

  • Jorge Katsumi Niyama

    (Universidade de Brasília)

  • Cesar Augusto Tiburcio Silva

    (Universidade de Brasília)

Abstract

The objective of the research is to analyze the auditors' perception regarding the measurement of the fair value of complex financial instruments level 3 in financial institutions. A questionnaire was applied with a sample of 62 independent auditors with technical qualification in financial institutions of large audit firms among partners, managers and senior auditors. The tools used were the Logistic Regression Test (LOGIT); The Kruskal- Wallis test, and the matching analysis test. Subjectivity was an implicit characteristic in the process where the auditors remained conservative. However, differences of values were identified that resulted in immaterial issues and an indication of divergences in the measurement of accounting estimates. As a suggestion of improvement in the audit processes, a more robust academic formation and the inclusion of a financial expert in the teams were identified. Opinions diverge as to the partners and managers, where they pointed out more agreement with the issues than the managers.

Suggested Citation

  • Paulo Cesar de Melo Mendes & Jorge Katsumi Niyama & Cesar Augusto Tiburcio Silva, 2018. "The Perception of Auditors in the Measurement of Instruments Financial Institutions at Fair Value in Financial Institutions," Brazilian Business Review, Fucape Business School, vol. 15(4), pages 363-381, July.
    • Handle: RePEc:bbz:fcpbbr:v:15:y:2018:i:4:p363-381
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    References listed on IDEAS

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    1. Benston, George J., 2006. "Fair-value accounting: A cautionary tale from Enron," Journal of Accounting and Public Policy, Elsevier, vol. 25(4), pages 465-484.
    2. Mary Barth & Wayne Landsman, 2010. "How did Financial Reporting Contribute to the Financial Crisis?," European Accounting Review, Taylor & Francis Journals, vol. 19(3), pages 399-423.
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