دانلود رایگان مقاله انگلیسی افشای ارزش منصفانه دارایی های برنامه بازنشستگی و هزینه های حسابرسی - الزویر 2018

ABSTRACT

Effective December 2009, FAS 132(R)-1 expands the prior disclosure requirements on pension plan assets by requiring firms to disclose the fair value inputs and measurements of pension assets. This study examines whether the different level of pension asset fair value inputs required under FAS 132(R)-1 affects audit fees, and investigates whether more expanded fair value disclosure requirements alone can have any impact on audit fees that proxy for auditors’ efforts. During our sample period from 2009 to 2010, we find supporting evidence that audit fees are an increasing function of Level 3 fair value assets that are more subjective. In addition, in a difference-in-difference test, we find evidence supporting our hypothesis that audit firms increase their audit fees after the adoption of FAS 132(R)-1, especially for the client firms that have more Level 3 pension assets. Considering that auditors have had access to the detailed fair value measurement information even before 2009, our results imply that a more detailed disclosure requirement on pension plan assets alone can affect auditors’ audit efforts and audit fees accordingly.

6. Conclusion

This paper investigates how fair value hierarchy levels of pension assets affect audit fees associated with pension plans, and examines whether the mandated disclosure of fair value itself affects audit fees. We hypothesize that audit firms increase their audit fees for client firms that have more Level 3 assets, and we find supporting evidence. In addition, we posit that audit firms are likely to adjust audit fees upward after mandated disclosure of fair value inputs and valuation techniques for pension assets. In particular, we compare the changes in audit fees in the pre- and post-FAS 132(R)-1 period for the firms holding more Level 3 pension assets to the changes in audit fees for the control firms over the same period. Because pension assets have been measured at fair value and available to the auditors even in the pre-FAS 132(R)-1 period, our research design enables us to investigate the effect of additional required disclosure of fair value on audit fees with the adoption of FAS 132(R)-1. We find that audit firms charge higher audit fees for the firms that hold more Level 3 pension assets under the mandated disclosure of fair value inputs and measurements. The results imply that expanded disclosure requirements alone can affect auditors’ audit efforts and audit fees accordingly.