AICPA backs Senate bill to exempt BV analysts from fiduciary rules

BVWireIssue #119-3
August 15, 2012

Last week, Barry Melancon, AICPA president and CEO, submitted a letter in support of
S. 1232, a bill that would, according to its title, “modify the definition of fiduciary under the Employee Retirement Income Security Act of 1974 to exclude appraisers of employee stock ownership plans.” Introduced in June 2011 by Sen. Kelly Ayotte (R-NH), the bill has since gained six co-sponsors, including one Democrat, but is still tabled in committee.

In Melancon’s letter, he asks Senators Tom Harkin (D-IA) and Mike Enzi (R-WY), the chair and ranking member, respectively, of the Health Education Labor and Pensions Committee, to join as sponsors of the legislation:

Many CPAs perform business valuation services and many of these CPAs regularly value the stock of employer corporations that sponsor ESOPs. These employer stock valuations are typically performed for transaction, taxation, or annual Department of Labor (DOL) reporting requirements. Importantly, AICPA members must abide by the AICPA’s Code of Professional Conduct when performing valuations, which requires CPAs to “be impartial, intellectually honest, disinterested, and free from conflicts of interest.” As you know, a fiduciary is bound to act for another’s benefit and, therefore, we believe CPAs, working as appraisers, cannot, by definition, be acting on behalf of the beneficiaries of an ESOP.

“The AICPA will continue to monitor this issue and advocate on behalf of CPAs and valuation professionals who perform ESOP valuations,” says Eddy Parker, technical manager of the AICPA’s Forensic and Valuation Services section. “If either you or your senator has any questions regarding this issue, please contact Diana Deem, Senior Manager of Congressional and Political Affairs, at the AICPA (202-434-9276 or” To read up on all the advocacy efforts of the FVS Section, including a posting of Melancon’s letter, click here.

Please let us know if you have any comments about this article or enhancements you would like to see.