{"title":"审查审计人员评估公允价值估算合理性的能力","authors":"Sabrina Gong, Yamin Hao, Nam Ho","doi":"10.1002/jcaf.22654","DOIUrl":null,"url":null,"abstract":"<p>One of the most difficult challenges facing contemporary auditors is evaluating the reasonableness of fair value estimates (FVEs) made by management. Both practitioners and academic studies have shown auditors to be deficient when tasked with assessing FVEs. However, it is not well understood whether the root cause of this deficiency lies in auditors’ lack of knowledge to appropriately evaluate estimates or auditors’ lack of willingness to challenge management. Using the setting of common auditors in M&A transactions, this study empirically examines whether the audit deficiency can be resolved by providing auditors with additional knowledge or willingness. Our results show that common auditors significantly outperform their peers when tasked with assessing the reasonableness of FVEs in purchase price allocations and reducing overallocation to goodwill when managers have incentives to do so. Further, the evidence is consistent with common auditors demonstrating improved performance in challenging information environments, but not in scenarios where risks to auditors may be perceived to be higher. The results suggest that it is their greater asset-specific knowledge that drives mitigation of the audit deficiency and that targeting improvements to knowledge rather than willingness is likely to be more effective in improving auditors’ ability to evaluate FVEs.</p>","PeriodicalId":44561,"journal":{"name":"Journal of Corporate Accounting and Finance","volume":null,"pages":null},"PeriodicalIF":0.9000,"publicationDate":"2023-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":"{\"title\":\"Examining auditors’ ability to evaluate the reasonableness of fair value estimates\",\"authors\":\"Sabrina Gong, Yamin Hao, Nam Ho\",\"doi\":\"10.1002/jcaf.22654\",\"DOIUrl\":null,\"url\":null,\"abstract\":\"<p>One of the most difficult challenges facing contemporary auditors is evaluating the reasonableness of fair value estimates (FVEs) made by management. Both practitioners and academic studies have shown auditors to be deficient when tasked with assessing FVEs. However, it is not well understood whether the root cause of this deficiency lies in auditors’ lack of knowledge to appropriately evaluate estimates or auditors’ lack of willingness to challenge management. Using the setting of common auditors in M&A transactions, this study empirically examines whether the audit deficiency can be resolved by providing auditors with additional knowledge or willingness. Our results show that common auditors significantly outperform their peers when tasked with assessing the reasonableness of FVEs in purchase price allocations and reducing overallocation to goodwill when managers have incentives to do so. Further, the evidence is consistent with common auditors demonstrating improved performance in challenging information environments, but not in scenarios where risks to auditors may be perceived to be higher. The results suggest that it is their greater asset-specific knowledge that drives mitigation of the audit deficiency and that targeting improvements to knowledge rather than willingness is likely to be more effective in improving auditors’ ability to evaluate FVEs.</p>\",\"PeriodicalId\":44561,\"journal\":{\"name\":\"Journal of Corporate Accounting and Finance\",\"volume\":null,\"pages\":null},\"PeriodicalIF\":0.9000,\"publicationDate\":\"2023-08-01\",\"publicationTypes\":\"Journal Article\",\"fieldsOfStudy\":null,\"isOpenAccess\":false,\"openAccessPdf\":\"\",\"citationCount\":\"0\",\"resultStr\":null,\"platform\":\"Semanticscholar\",\"paperid\":null,\"PeriodicalName\":\"Journal of Corporate Accounting and Finance\",\"FirstCategoryId\":\"1085\",\"ListUrlMain\":\"https://onlinelibrary.wiley.com/doi/10.1002/jcaf.22654\",\"RegionNum\":0,\"RegionCategory\":null,\"ArticlePicture\":[],\"TitleCN\":null,\"AbstractTextCN\":null,\"PMCID\":null,\"EPubDate\":\"\",\"PubModel\":\"\",\"JCR\":\"Q3\",\"JCRName\":\"BUSINESS, FINANCE\",\"Score\":null,\"Total\":0}","platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Corporate Accounting and Finance","FirstCategoryId":"1085","ListUrlMain":"https://onlinelibrary.wiley.com/doi/10.1002/jcaf.22654","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
Examining auditors’ ability to evaluate the reasonableness of fair value estimates
One of the most difficult challenges facing contemporary auditors is evaluating the reasonableness of fair value estimates (FVEs) made by management. Both practitioners and academic studies have shown auditors to be deficient when tasked with assessing FVEs. However, it is not well understood whether the root cause of this deficiency lies in auditors’ lack of knowledge to appropriately evaluate estimates or auditors’ lack of willingness to challenge management. Using the setting of common auditors in M&A transactions, this study empirically examines whether the audit deficiency can be resolved by providing auditors with additional knowledge or willingness. Our results show that common auditors significantly outperform their peers when tasked with assessing the reasonableness of FVEs in purchase price allocations and reducing overallocation to goodwill when managers have incentives to do so. Further, the evidence is consistent with common auditors demonstrating improved performance in challenging information environments, but not in scenarios where risks to auditors may be perceived to be higher. The results suggest that it is their greater asset-specific knowledge that drives mitigation of the audit deficiency and that targeting improvements to knowledge rather than willingness is likely to be more effective in improving auditors’ ability to evaluate FVEs.