Is the price right? — Management must assume responsibility for fair value
Abstract: Estimating the fair value of a public company’s investments can be difficult and subjective. Many companies rely on third-party pricing sources such as broker/dealers or valuation specialists for fair value recommendations. When companies do so, it’s important that their management understand its responsibility to oversee the process and implement effective internal controls for financial reporting purposes. This article lists questions that management should ask and controls it might implement. A sidebar discusses the three-tier fair value hierarchy.