Fair value measurement and accounting restatements

Yi Hung Lin, Steve Lin, James M. Fornaro, Hua-Wei Huang

Research output: Contribution to journalArticle

7 Citations (Scopus)

Abstract

This study investigates the association between accounting restatements and reporting different levels of fair value measurements as defined by SFAS No. 157. We find that firms with higher ratios of Level 3 fair value assets (i.e., financial assets which fair values are determined by unobservable, firm-generated inputs) to total assets are more likely to subsequently restate their financial statements. Further analysis shows that this association is driven by the restatements caused by errors and managerial manipulation. Overall, our results suggest that use of less reliable (Level 3) fair value measurements may reduce financial reporting quality.

Original languageEnglish
Pages (from-to)30-45
Number of pages16
JournalAdvances in Accounting
Volume38
DOIs
Publication statusPublished - 2017 Sep 1

Fingerprint

Accounting restatements
Fair value
Assets
Financial reporting quality
Financial assets
Financial statements
Restatements
Manipulation

All Science Journal Classification (ASJC) codes

  • Accounting
  • Finance

Cite this

Lin, Yi Hung ; Lin, Steve ; Fornaro, James M. ; Huang, Hua-Wei. / Fair value measurement and accounting restatements. In: Advances in Accounting. 2017 ; Vol. 38. pp. 30-45.
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Fair value measurement and accounting restatements. / Lin, Yi Hung; Lin, Steve; Fornaro, James M.; Huang, Hua-Wei.

In: Advances in Accounting, Vol. 38, 01.09.2017, p. 30-45.

Research output: Contribution to journalArticle

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