Occasionally, as part of the valuation practice within a public accounting firm, “we will review valuations and find the certification/representation missing from the valuation report,” says Lee C. Russell, an executive director with Ernst & Young and a member of the ASA’s BV Committee, who contributed the most recent E-letter to members. When asked about the omission, the appraiser may respond by saying one of two things, Russell says: “I’m not required to sign an individual appraiser certification/representation, because this report represents the conclusion of my company, not me personally,” or, “this report is not required to be in compliance with the Uniform Standards of Professional Appraisal Practice (USPAP); therefore I’m not required to sign an appraiser certification/representation.”
But, as Russell points out, USPAP’s Standards Rule 10-3 requires “each written appraisal report” to contain a signed certification” that complies with a stated form. The AICPA’s SSVS-1 requires any written report to contain a similar representation, and of course, the ASA’s BV standards specifically require compliance with USPAP.
“If a valuation report is not required to be in compliance with USPAP, is a signed appraiser certification/representation still required?” Russell asks. “The answer is that it may very well still be required in most cases, depending on who the individual appraiser is.” If accredited with the ASA, appraisers are required to follow USPAP, and if a CPA, then SSVS-1 applies. In sum, Russell hopes this explains why reviewers in public accounting firms will look for signed appraiser certifications “as evidence to support their review conclusions, not only regarding valuation methodology and valuation assumptions, but first and foremost regarding appraiser independence and objectivity.”
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