Accounting Estimates in Financial Statement Audit

Abstract

This study investigates the relationship between the transparency of financial statement disclosures, the complexity of valuation models, and the audit quality of accounting estimates. In the context of International Financial Reporting Standards (IFRS) and the revised International Standard on Auditing (ISA 540), which increasingly emphasize fair value measurement and disclosure, auditors face significant challenges related to uncertainty and the risk of material misstatement in accounting estimates. A synthesis of prior theories and empirical evidence reveals that: (i) transparent disclosures help reduce information asymmetry and enhance auditors’ evaluative capacity; (ii) the greater the complexity of valuation models, the more the reliability of audits is challenged; and (iii) audit quality critically depends on professional skepticism, auditors’ expertise, and the application of international standards. The study contributes by providing a comprehensive analytical framework for improving audit quality in the context of IFRS adoption in Vietnam.