Date: November 3, 2014

Issue: Fair Value Accounting

To: PCAOB

Filing Type: Regulatory

Description: FIRCA has concerns that the PCAOB has inferred, but not necessarily demonstrated, a problem with fair value estimates. Further, for stakeholders to benefit from the findings in the paper, it must be understood how any such audit or disclosure-based fair value practices do not take into account estimates in illiquid markets, such as for many corporate bonds. In addition to these points, FIRCA believes that the intent to combine the three different current audit standards for estimates, fair value measurements, hedging and derivatives into one standard is fraught with adverse unintended consequences and will exacerbate financial reporting complexity. FIRCA is also concerned that suggested revisions to auditing standards in the Fair Value Paper appear to be prescriptive rather than principles-based and potentially more focused on facilitating the inspection process rather than improving audit effectiveness.

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