The Application of Fair Value Accounting in Banking Industry and Government Audit Involved

The paper first reviews the criticism, attitude and the general trend about fair value accounting(FVA) in international banking industry, then analysis the situation of applying FVA in domestic banking industry and its problems. Subsequently, in considering to avoid FVA's weaknesses and apply its advantages for improving financial information transparency and relevance, the author takes a new perspective that government audit as a external force should be introduced in to lead banks rationally use FVA, because government audit possesses some good characters such as strong independent which help expose and solve problems in applying FVA, and macro-oriented goal which help auditors focus on bank value volatility risk and urge banks deal with the risk properly.