https://francinemckenna.com/wp-content/francine-mckenna.png 0 0 Francine https://francinemckenna.com/wp-content/francine-mckenna.png Francine2008-04-14 06:20:002008-04-14 06:20:00Fair Value – What Goes Up, Must Come Down
IMF, IIF Rec’s on Market Turmoil Are Far-Reaching, Include Fair Value, Off-Balance Sheet; Q&A With Michael Young, Willkie Farr
It’s everything you always wanted to know about the latest in fair value accounting, FAS 157, and the role of accounting standards in economic activity.
Re: the auditors’ role in this debate, here’s an excerpt:
The IMF report continued: “External auditors are likely to adopt a cautious approach to minimize the risks of material post-balance-sheet-date writedowns that would leave the auditor open to charges of negligence,” observes IMF. “Hence, the level of additional writedowns in the audited financial statements will likely reflect the convergence of the entity’s valuation assumptions with those adopted by the auditors.” However, IMF cautions, “The adoption of the auditors’ approach raises the risk of a negative bias in the valuations.”
It looks like a no-win situation. So are they really serving any purpose in this process? Especially since they have to ask someone else what the right values are?
I made a comment, too!