TY - UNPD A1 - Goncharov, Igor A1 - Riedl, Edward J. A1 - Sellhorn, Thorsten T1 - Fair value and audit fees N2 - This paper investigates the effect of fair value reporting and its attributes on audit fees. We use as our primary sample the European real estate industry around mandatory IFRS adoption (under which reporting of property fair values becomes compulsory), due to its unique operating and reporting characteristics. We document lower audit fees for firms reporting property assets at fair value relative to those employing depreciated cost―a difference that appears driven (in part) by impairment tests that occur only under depreciated cost. We further find that audit fees are decreasing in firm’s exposure to fair value, and increasing both in the complexity of the fair value estimation and for recognition (versus only disclosure) of fair values. We corroborate our findings in two alternative settings: contrasting UK and US real estate firms; and using UK investment trusts. Overall, the results suggest that fair values can lead to lower monitoring costs; however, any reductions in audit fees will vary with salient characteristics of the fair value reporting, including the difficulty to measure and the treatment within the financial statements. T3 - FAccT Center Working Paper Series - 01/2012 KW - Verkehrswert KW - Fair value KW - Prüfungshonorar KW - Audit fee KW - Audit-Preisgestaltung KW - Audit pricing KW - Immobilienwirtschaft KW - Real estate industry KW - IFRS KW - IFRS Y1 - 2011 UR - https://opus4.kobv.de/opus4-whu/frontdoor/index/index/docId/681 UR - https://nbn-resolving.org/urn:nbn:de:hbz:992-opus4-6811 N1 - Published in: Review of Accounting Studies19(2014)1, pp. 210-41 PB - WHU - Otto Beisheim School of Management CY - Vallendar ER -