Since 2005, the SEC has been speaking out as to the fragmentation of the valuation profession and that the profession would benefit from unified qualifications, standards and oversight. While accountants, who audit financial statements with valuation estimates, have a common credential, the CPA, the valuation profession, which provides valuation estimates for financial reporting, have many designations, the ASA, CFA, RICS and the ABV among others. The CEIV credential will unify valuation professionals with a common framework, standards and body of knowledge. In turn the consistency brought to the profession by the credential should enhance documentation of approaches and underlying assumptions made by the valuation professional as well as by company management which, in turn, should make auditors, and more importantly, the PCAOB, more comfortable with the estimates. Overall the goal of the credential is to instill trust in the profession by regulators.
Nancy Czaplinski, CPA/ABV/CGMA, CFA, ASA, Managing Director, Valuation Services-AA, Duff & Phelps, LLC, Milwaukee, WI
The CEIV credential and corresponding mandatory performance framework will redefine how valuation engagements are performed for financial reporting. It will improve the quality and audibility of fair value measurements and place the responsibility of the work product on the valuation professional. The adoption and implementation of such a credential will provide standards setters and third-party users of fair value measurements greater assurance that the work was performed by qualified professionals. I am proud to be part of establishing such an important credential to protect the public interest.
Nathan DiNatale, CPA, ABV, Principal, SC&H Group, Baltimore, MD
For years there has been criticism about the “Alphabet Soup” of different valuation credentials and the difficulties in trying to evaluate and compare those credentials. The new CEIV credential is a landmark step forward toward having a more uniform set of valuation standards and qualifications. This effort has been an unprecedented collaboration amongst valuation organizations to advance and improve our profession, and I have been thrilled to be part of the effort as a representative for the ASA.
William A. Johnston, ASA, Managing Director, Empire Valuation Consultants, LLC, New York, NY
Fair value measures form the basis of sound financial reporting. It is critically important that the professionals working in this field make every attempt to continuously improve levels of consistency and transparency, for the good of our clients and for the public at large. The creation of a new industry-wide credential and fair value framework emphasizes the importance we place on prudent financial management and will play a major role in enhancing market confidence.
Leigh Miller ASA, CPA, FRICS, Americas Valuation and Business Modeling Leader, Ernst & Young, New York, NY
The impact on business valuers of the Fair Value Quality Initiative (FVQI) can be viewed using the variables of growth (G) and risk (R). Benefits to business valuation professionals include improved practice revenues (G) as management and unskilled individuals perform fewer projects due to the Mandatory Performance Framework (MPF) requirements. Project fees may also increase as a result of the MPF. Practice risk (R) should decrease as the MPF provides improved guidance on minimum performance requirements. Increases in project fees should also reduce the pressure to “cut corners” associated with low fee compliance projects. The FVQI will also reduce the risk of possible government regulation of the BV profession.
Raymond D. Rath, ASA, CFA, Managing Director, Globalview Advisors, Irvine, CA
Fair value measurement has become a critical process in developing financial reports. This new CEIV credential is a necessary step in the evolution of the valuation profession. It will ensure a transparent process that provides consistently accurate results that can be relied upon with confidence by clients, companies, regulators and the public.
Mark Zyla, CPA, ABV, CFF, CFA, ASA, Managing Director, Acuitas, Inc., Atlanta, GA
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The trademarks CEIV and CERTIFIED IN ENTITY AND INTANGIBLE VALUATIONS are owned by Corporate and Intangibles Valuation Organization, LLC, and are used under license agreements between Corporate and Intangibles Valuation Organization, LLC and RICS, ASA and AICPA.