Risks related to fair value (FV) estimates and their impact on the audit process represent a crucial topic in accounting and audit literature. Therefore, this paper focuses on one of the influential factors of FV estimation and related risks in audit missions, i.e. the valuation process performed (provider and measurement). In doing so, it addressees a less analysed FV level of estimation – level 3 according to IFRS 13, ’the models’, for the case of tangible assets. An experiment is conducted on a group of auditors, members of the Romanian audit professional body. The results reveal that, if the internal control quality is high, auditors differentiate between FV providers in the case of: FV measurement, i.e. income valuation approach versus cost approach, which implies additional effort for verification and risk of misstatement, when the estimation is provided by a third party instead of management. These findings could be related to the volatility of the investigated economic context and the respondents’ level of knowledge and expertise. We infer that respondents have a moderate understanding of valuation logic and methodology while excessively relying on their own valuator.

Through this study, the author aimed to analyze the evolution of international and American auditing standards on accounting estimates following the recent amendments initiated by the IAASB and PCAOB and to determine the degree of convergence between them. The results of the statistical tests show an increase in the level of convergence between the two referential (ISA 540 & AS 2501) and an improvement of the new ISA 540 compared to the old standard. This analysis demonstrates the similarity between the risk approaches specific to the estimates for the two measures, but also the existence of differences regarding the fair value and the use of external sources by the management or the auditor.

This paper checks if the auditors in an emergent context, where the fair value (FV) concept, its implementation and audit are relatively new, are aware of the estimation risk induced by the valuation process (the FV provider and FV disclosure), depending on the quality of internal control (IC). An experiment was applied to a group of auditors and master students, using two elements pertaining to FV reporting: “Valuation attributes and sensitivity of data”, respectively “Methods, assumptions and model”. This experiment revealed that: (1) FV audit risk is lower when the estimation is made by an external, instead of an internal valuator; (2) the master’s students, compared to more experienced professional auditors, manifest an overconfidence in the external Valuation Report in terms of valuation attributes, data availability and solutions adopted to test the sensitivity of value; (3) the audit risk is lower when the valuator is external and hence the auditors verify in detail the information provided in the Valuation Report as inputs and methods applied; (4) when IC is strong as quality, the verification of methods, assumptions and model induces for auditors a higher risk than the other FV disclosed component, valuation attributes and sensitivity of data, in the case of management estimation.