Published Online:January 2025
Product Name:The IUP Journal of Accounting Research & Audit Practices
Product Type:Article
Product Code:IJARAP050125
DOI:10.71329/IUPJARAP/2025.24.1.68-81
Author Name:Antima Sharma and G Soral
Availability:YES
Subject/Domain:Finance
Download Format:PDF
Pages:68-81
The paper examines the impact of appointment of auditors on fair valuation. It also examines whether there is any trend between percentage of fair value of investment property and historical value of investment property, and whether the appointment of the Big Four audit firms and the said trend is correlated. For the study, 19 companies listed on the Bombay Stock Exchange, which had an investment property in their balance sheet, were used. The sample period was from April 1, 2016 to March 31, 2020. The results reveal that companies that appoint Big Four audit firms to audit their financial statements either classify their assets into level-3 hierarchy or prevent themselves from classifying them into any level of fair value hierarchy. Companies that appoint non-Big Four audit firms classify their assets into level-2 hierarchy. Further, the results reveal that there is no single trend between percentage of fair value of investment property and historical value of investment property for all companies. The results also reveal that the trend and the appointment of Big Four audit firms are not correlated.
The study examines whether the appointment of Big Four audit firms—Deloitte Haskins & Sells, Ernst & Young, KPMG and PwC—affects the classification of fair value assets into different levels (level 1, level 2 and level 3) of fair value hierarchy.