Banks using some auditing firms took larger write-downs than others, according to a new analysis, and that once again raises the question of just how fair fair value accounting really is.

Banks that used Deloitte and Ernst & Young seemed to take a bigger hit on the value of their loans than those that used the other major auditing firms, according to an analysis by Michael Rapoport of The Wall Street Journal. He noted that the two firms may have simply had a “less-healthy group of bank clients than other firms,” but the analysis suggests that some firms are taking a tougher line than others in applying the Financial Accounting Standards Board’s fair value measurement rules. That shouldn’t come as a surprise, given that both FASB and its international counterpart, the IASB, have been adjusting those standards under pressure from both the banks and the politicians.

The AICPA has recently published some guidance to help accountants sort out some of those fair value standards for “alternative investments” such as hedge funds (see AICPA Offers Guidance on Fair Value of Investments). The practice aids promise to help provide some clarity on a murky subject.

Apparently, one emerging area that could become more important for accountants to deal with is fraud related to fair value measurement. I recently received a new book in the mail, “Fair Value Accounting Fraud: New Global Risks and Detection Techniques” by Gerald M. Zack (Wiley, 2009). Zack, who is president of a firm called Zack P.C., aims to help fraud investigators and auditors understand the many risks of fraud involved in how fair value accounting is applied during the preparation of financial statements.

“Fair value accounting is not for the timid,” he wrote. “It makes some people uncomfortable (they are called the auditors). It involves a tremendous amount of judgment and estimation. It also frequently involves a highly specialized expertise. And whenever accounting involves a significant amount of judgment and estimation, it becomes infinitely more susceptible to manipulation and fraud.”

Indeed, with all the confusion and conflicting and evolving standards, fair value accounting increasingly appears to be the latest iteration of creative accounting.