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ABSTRACT Fair value measurements (FVM) have now emerged as an integral part of accounting and auditing standards. Many countries across the globe have initiated FVM-based standards and others are in the process of their adoption. The FVM audit process is, nevertheless, a tedious job for auditors, mainly because of the influence of numerous direct or indirect factors in the audit process and its outcome. A major issue for auditors is to identify and understand the complexity of these factors for a FVM audit. To the best of the authors' knowledge, extant literature discusses these factors independently but fails to identify and analyze their interrelationships and holistic impact on the FVM audit process. The authors strongly feel that a comprehensive study of these factors may help in a better understanding of the FVM audit process. With this backdrop, interpretive structural modeling (ISM) has been employed for studying and establishing the relationships among the factors in this article. While discussing the interdependence of factors, an attempt is also made to classify them as drivers (that affect others) and dependent (affected by driving) factors in the FVM audit process. Contextual areas of further research have also been identified. This study can be of use to practitioners, academicians, and standard-setting regulators to better understand the FVM audit process.
Doliya et al. (Sun,) studied this question.