Fair value measurement and accounting restatements

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

Research output: Contribution to journalArticlepeer-review

18 Citations (Scopus)


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
Publication statusPublished - 2017 Sept

All Science Journal Classification (ASJC) codes

  • Accounting
  • Finance


Dive into the research topics of 'Fair value measurement and accounting restatements'. Together they form a unique fingerprint.

Cite this