Abstract: This study focuses the impact of mandatory adoption of Financial Reporting Standard (FRS) 139 financial instruments: Recognition and measurement on audit fees in Malaysia. This study examines the subjectivity and complexity of fair value adoption towards the audit fees charged by auditors among public listed companies in Malaysia. The study used the samples of 150 firms listed on the Bursa Malaysia for the financial year ending 2009 and 2010 as mandatory adoption of FRS 139 begin on or beginning of 1 January, 2010 in Malaysia. The study found that adjustment for the re-measurement of financial instruments in the beginning balance of retained earnings or equity upon adoption of FRS 139 is associated with changes in audit fees. Some new categories of financial instruments that presented in the statement of financial position were found, due to recognition of previously unrecognized financial instruments and reclassifications to the new accounts, however this study found no changes in term of audit fees. The fair value changes of financial instruments should be recognised in the profit or loss upon adoption of FRS 139, the result shown that significant relationship between the recognition of gain or loss for financial instrument and changes in audit fees.
Boon Heng The, Sin Huei Ng, Tze San Ong and Wei Ni Soh, 2013. The Impact of Financial Reporting Standard 139 Financial Instruments: Recognition and Measurement on Audit Fees. The Social Sciences, 8: 610-617.