（2003）The Auditor’s Approach to Fair Value.pdfVIP

AUDITING SAS no. 10 1 expancjs auditors role in assessing fair value measurements. The Auditors Approach to Fair Value Y S U S A N L . M E N E L A I D E S , L Y N F O R D E . G R A H A A N D G R E T C H E N F I S C H B A C H he auditing standards board (ASB) issued Statement on Auditing Stan- dards (SAS) no . 101 , Auditing Fair Value Measurements and Disclosures, in January. The standard, which is effective for audits of financial statements for periods beginning on or after June 15, contains significantly expanded guid- ance for auditing fair value measurements and disclosures. valuc estimates. Instead, the SAS provides guidance on un- This article will help practitioners understand its more sig- derstanding managements process for developing fair value nificant aspects. estimates and evaluating whether the measurement con - The requirement to measure some financial statement forms to generally accepted accounting principles (GAAP). items at fair value has been in the accounting literature for Consequently, the auditor evaluates the significant assump- many years, but until now, the source of tions, considers the appropriateness ofthe general auditing guidance has been SAS valuation model and tests the underlying no . 57 , Auditinji Accounting Estimates. Fair What Auditors data. Th e auditor does this even when value estimates differ from other account-