Fair Value Information, Audit fees and Audit Committee in Taiwan

Abstract

Regulatory requirements to adopt IFRS and to disclose audit fees make it possible to examine association between audit fees and proportion of fair-valued assets among firms in Taiwan. A voluntary choice of adding audit committee in the firm for monitoring purpose also helps to examine the association further. Empirical results indicate that lower audit fees is related to higher proportion of (Level 2) fair-valued assets, a finding consistent to Goncharov et al.'s (2014) suggestion that firms pay lower audit fees with fair-value model than with cost model. Insignificant association is found for proportion of Level 3 fair-valued assets, which is similar to Glover et al. 's (2014) suggestion that firm's reluctant attitude in adopting Level 3 assets. Last of all, when audit committee is added, firm's audit fees is negatively associated with Level 1 and 2 fair-valued assets, implying audit committee's role of monitoring and further reducing audit risk and audit fees among Taiwanese firms.

Fair Value Accounting for Non-Current Assets and its Role in Determining Auditing Fees

“…Furthermore, the study found a difference in the non-current assets' fair value on audit fees through corporate governance represented by the independent board of directors as well as a difference in the non-current assets' fair value on audit fees by different fair value valuation methods measured at the first, second and third levels. Barth and Landsman, 2010;Laux and Leuz, 2009;Landsman, 2007;Wu et al, 2017 al., 2014;Hapsari and Apandi, 2018;Goncharov et al, 2014;Shamsaddini and Amiri, 2017;Wu et al, 2017…”