Accountability in Auditing Fair Value Measurements and Other Estimates : Based on Recent Accounting Fraud Cases

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  • 公正価値等監査における監査人のアカウンタビリティ : 近年の不正会計事例を踏まえて
  • コウセイ カチ トウ カンサ ニ オケル カンサニン ノ アカウンタビリティ : キンネン ノ フセイ カイケイ ジレイ オ フマエテ

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Abstract

In recent years, accounting fraud cases over accounting estimates have been conspicuousin Japan, and internationally significant measurement uncertainty in accounting estimates,including fair value measurements, also has come to be identified as an importantissue in auditing. In this article, I consider the method of effective audit of accounting estimates,including fair value measurements, as a bulwark against management fraud,while accounting areas( level 3 fair value, etc.) with broad management discretion andhigh uncertainty are expanding under the International Financial Reporting Standards(IFRS).Specifically, after determining that there is doubt about fraud in accounting estimates based on the Standard to Address Risks of Fraud in an Audit, I emphasize the importance of using the negative testing approach, which is one specific aspect of professional skepticism, and also discuss the need to explicitly describe it in the Auditing Practice Statements, etc. Although the depth of such audit work is so-called black-box so far, auditors should be required to disclose KAM(key audit matters) relating to complex accounting estimates in their audit reports from the point of view of auditors' accountability. It is expectedthat KAM will provide signaling information for audit quality.

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