Scientific Journal Of King Faisal University
Basic and Applied Sciences


Scientific Journal of King Faisal University / Humanities and Management Sciences

Fair Value Accounting for Non-Current Assets and its Role in Determining Auditing Fees

(Hanady Hussien Alshdaifat and Nidal Omar Zalloum )


The study aimed to identify the role of non-current assets’ fair value in determining audit fees, in addition to studying the impact of non-current assets’ fair value on audit fees. This was achieved through different valuation methods and the corporate governance represented by board independence for the period of 2013 to 2018. The study included 50 industrial companies listed on the ASE. 'The panel data was processed using the fixed effects model, and the study found that there is a reverse effect of the non-current assets’ fair value on the audit fees. Furthermore, the study found a difference in the non-current assets’ fair value on audit fees through corporate governance represented by the independent board of directors as well as a difference in the non-current assets’ fair value on audit fees by different fair value valuation methods measured at the first, second and third levels.

Evaluation methods, corporate governance, independence, board of directors, historical cost, Amman Stock Exchange



Alexeyeva, I. and Mejia‐Likosova, M. (2016). The impact of fair value measurement on audit fees: Evidence from financial institutions in 24 European Countries. International Journal of Auditing, 20(3), 255–66.‏ 
 Almatarinat, G.F. and Bashaira, M. M. (2006). Madaa ailtizam alsharikat aleama al'urduniya bialmuhasaba ean alaistithmar fi al'ashum walsunadat fi daw' mieyar almuhasaba alduwalia raqm 39 (draasa midania) ‘The extent of Jordanian Companies’Commitment to accounting and investing in stocks and bonds in view of international accounting standard No. 39 (field study)’. Damascus University Journal of Economic and Legal Sciences, 22(2), 131–81.  [in Arabic [
Alsaeafin, H. (2003). Alaitijahat almhasby alhaditha fi taqyim almawjudat mieyar almuhasaba alduwalii raqm (39) waraqm (40) wa'athariha ealaa alqararat alaistithmaria lisharikat altaamin ‘Modern accounting trends in assessing assets international accounting standard No. (39) and No. (40) and their impact on investment decisions for insurance companies’. The Arab Journal of Administrative Sciences, n/a(53), 52–3. [in Arabic]
Ardakani, R.R., Nemati, K. and Moridi, F. (2017). Investigating the relationship between fair value accounting of non-current assets and audit fees in listed companies in Tehran Stock Exchange. HELIX, 7(2), 944–51.‏
Barth, M.E. and Landsman, W.R. (2010). How did financial reporting contribute to the financial crisis?. European Accounting Review, 19(3), 399–423.‏
Bouqalieh, B.K. and Zalloum, N.O. (2019). 'Athar jawdat altadqiq ealaa taklifat huquq almalakia -dirasa tatbiqia ealaa alsharikat alsinaeia walkhadamia almudraja fi bursat amman ‘The impact of audit quality on the cost of equity capital: An empirical study of industrial and services companies listed on Amman Stock Exchange’. Jordan Journal of Business Administration, 15(1), 121–46. [in Arabic]
Brînză, D. and Bengescu, M. (2016). Accounting based on the historical cost versus accounting based on the fair value. Lucrări Științifice Management Agricol, 18(2), 145.‏
Chen, V.Y., Keung, E.C. and Lin, I.M. (2019). Disclosure of fair value measurement in goodwill impairment test and audit fees. Journal of Contemporary Accounting and Economics, 15(3), 100–60.‏
Dudin, H.M. (2018). Altahlil Alaihsayiyu Almutaqadim Lilbianat Biastikhdam SPSS ‘Advanced Statistical Analysis of Data Using SPSS’. 4th edition. Ammam, Jordan: Maisarah House for Publishing and Distribution. ]in Arabic [
Ettredge, M.L., Xu, Y. and Yi, H.S. (2014). Fair value measurements and audit fees: Evidence from the banking industry. Auditing: A Journal of Practice and Theory, 33(3), 33–58.‏
Goncharov, I., Riedl, E.J. and Sellhorn, T. (2014). Fair value and audit fees. Review of Accounting Studies, 19(1), 210–41.‏
Hair, J.F., Black, W.C., Babin, B.J., Anderson, R.E. and Tatham, R.L. (2018). Multivariate Data Analysis. 8th edition. EMEA: Cengage Learning.
Hapsari, B. and Apandi, R. (2018). Fair value of non-current assets and the second largest ownership on audit fee. The International Journal of Business Review (The Jobs Review), 1(1), 47–54.
Herrmann, D., Saudagaran, S.M. and Thomas, W.B. (2006). The quality of fair value measures for property, plant, and equipment. In Accounting Forum, 30(1), 43–59.
Hilali M. J. (2002). Almuhasibuh Alhukumia ‘Governmental Accounting’. Amman: Jordan: Dar Al-Safa for Printing, Publishing and Distribution. ]in Arabic [
Kajola, S.O., Olabisi, J. and Fapetu, O. (2019). Corporate governance mechanism and capital structure decision in Nigeria. Izvestiya, n/a(1), 50–68.‏
Kieso, D.E., Weygandt, J.J., Warfield, T.D., Wiecek, I.M. and McConomy, B.J. (2019). Intermediate Accounting. Volume 2. John Wiley and Sons.‏
Kikhia, H. Y. (2015), Determinants of audit fees: Evidence from Jordan, Accounting and Finance Research, 4(1), 42–53.
Landsman, W. (2007). Is fair value accounting information relevant and reliable? Evidence from capital market research. Accounting and Business Research. 37(1), 19–30.
Laux, C. and Leuz, C. (2009). The crisis of Fair-value accounting: Making sense of the recent debate. Accounting, Organizations and Society, 34(6–7), 826–34.
Martin, R.D., Rich, J.S. and Wilks, T.J. (2006). Auditing fair value measurements:  A synthesis of relevant research. Accounting Horizons, 20(3), 287–303.
Miah, M. S. (2019). Fair value, management discretion, and audit fees: An empirical analysis. Journal of Corporate Accounting and Finance, 30(2), 82–91.‏
Nguyen, N.T. (2014). Perceptions of Accounting Professionals Towards the Prospect of Implementing Fair Value Under IASB in Vietnamese Accounting System: A quantitative Study of Accounting Professionals in Vietnam.‏ Bachelor’s Dissertation, HAAGA-HELIA University of Applied Sciences, Helsinki, Finland.
Palea, V. (2014). Fair value accounting and its usefulness to financial statement users. Journal of Financial Reporting and Accounting, 12(2), 102–16.‏
Shamsaddini, H., and Amiri. M, (2017). Study about fair value accounting of non-current asset and audit fees in accepted companies in Tehran Stock Exchange. International Academic Journal of Accounting and Financial Management, 4(n/a), 65–70.
Sujana, R.S. and Mita, A.F. (2019). The selection of revaluation method and the independent valuer increase the audit fee: a case of ASEAN. The Indonesian Journal of Accounting Research, 22(1), 131–52.‏
Wu, S., Wu, T. and Yang, K. (2017). Fair value information, audit fees and audit committee in Taiwan. International Journal of Financial Research, 8(2), 124–34.
Yao, D., Percy, M. and Hu, F. (2015). Fair value accounting for non-current assets and audit fees: Evidence from Australian Companies. Journal of Contemporary Accounting and Economics, 11(1), 31–45.
Zalluom, N,O., Al-Shaar, I.M. and Al-Ziyoud, A.N. (2016). dawr tanafusiat almuntajat walmawjudat ghyr almalmusa fi haykal ras almal lilsharikat almusahama aleama al'urduniya "Role of product market competition and intangible assets in the capital structure of Jordanian Public Shareholding Firms’. Arab Journal of Administrative Sciences, 23(3), 423–57. [in Arabic]