The role of Board of Directors in activating measurement based on the fair value of companies operating in the petroleum sector “An Experimental Study”

Document Type : Original Article

Authors

Faculty of Commerce Benha University

Abstract

After the global financial crisis, fingers were pointed at fair value accounting, as it left the boards of directors free to evaluate assets, which led to many boards of directors manipulating the values ​​of establishments, which led to the collapse of many large companies. However, fair value measurements were not the cause of the global financial crisis. Accordingly, the international standard IFRS13 was issued to control fair value measurements, but it did not oblige boards of directors to follow a specific method of measurement, which opens the door to personal estimates and bias. Governance mechanisms were the main element for controlling fair value measurements, and the researcher chose the board of directors as one of the governance mechanisms to study its role in activating measurement based on fair value. In the first chapter, the researcher provided a theoretical foundation for fair value, and in the second chapter, the role of the board of directors and studied its impact on corporate governance, the challenges facing the board of directors when evaluating fair value, and the steps followed to ensure fair value measurement and activate its measurement. The third chapter was devoted by the researcher to test the research hypothesis. The researcher distributed a survey form to the study community consisting of a random sample of executive management officials in petroleum companies, internal audit department officials, accountants in the Egyptian General Petroleum Corporation, accounting and auditing offices, and accounting and auditing professors in universities.

Keywords

Benha Journal of Humanities Sciences
Volume 3, Issue 2
March and April 2024
Pages 481-510

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