Fair value measurement and audit fees: evidence from emerging market banks
JOURNAL OF ACCOUNTING IN EMERGING ECONOMIES, ss.1-23, 2026 (ESCI, Scopus)
- Yayın Türü: Makale / Tam Makale
- Basım Tarihi: 2026
- Doi Numarası: 10.1108/jaee-08-2025-0435
- Dergi Adı: JOURNAL OF ACCOUNTING IN EMERGING ECONOMIES
- Derginin Tarandığı İndeksler: Emerging Sources Citation Index (ESCI), Scopus
- Sayfa Sayıları: ss.1-23
- Anahtar Kelimeler: Audit fees, Banking industry, Emerging markets, Fair value measurement, IFRS 13, Islamic banks
- İstanbul Üniversitesi Adresli: Evet
Özet
Purpose This study investigates the impact of fair value measurement on audit fees in the Turkish banking industry. It examines whether IFRS 13 fair value hierarchy levels differentially affect fees and if these effects vary between conventional and Islamic banks.Design/methodology/approach The study employs panel data analysis using data from 49 Turkish banks from 2020 through 2024.Findings The overall proportion of fair value assets is positively associated with audit fees, a relationship primarily driven by Level 1 assets. While the full sample shows no significant impact for Level 2 or 3 assets, the results differ by bank type. Level 3 exposures increase fees for conventional banks, whereas Islamic banks show a negative interaction, suggesting Shariah governance mitigates valuation risk. Consequently, the pricing of Level 3 exposures depends heavily on the type of banking model.Practical implications Audit firms should calibrate engagement planning to clients' fair value intensity by deploying specialists for Level 3 exposures at conventional banks. Regulators should recognize that fair value hierarchy's audit complexity implications are context-dependent and that Shariah governance mechanisms significantly affect audit fees in Islamic banking.Originality/value Audit fee data for Turkish banks became public for the first time in 2020, enabling new empirical insights. This study contributes by distinguishing overall fair value intensity from level-specific effects (Levels 1-3) and establishing institutional heterogeneity by contrasting conventional and Islamic banks. Beyond simply adding the Turkish audit market to the literature, this study offers theoretical insights into the boundaries of Western models.