Will there be a ‘PCAOB’ for the valuation profession?

BVWireIssue #121-2
October 10, 2012

Remember when the SEC’s Paul Beswick made a public call for unifying the valuation profession under one set of credentials and standards? That speech last December “really slammed the profession,” said Steve Sherman (KPMG), who spoke to the opening session at the American Society of Appraisers’ 2012 BV Conference in Phoenix this week.

The speech also reflected a trend or “at least a hope” among SEC and other regulators that the valuation profession will start to “coalesce” around a single set of qualifications, standards, body of knowledge, and yes, even oversight, added co-presenter Anthony Aaron (Ernst & Young). Whether or when that will happen, as a voluntary “self-policing” effort or otherwise, neither Aaron nor Sherwin would hazard a prediction. What they agreed on: “When we have something like a Beswick speech,” Aaron said, “we have to pay attention and ask ourselves, ‘What do we do to make this better?’”

In that respect, Aaron reminded ASA attendees that The Appraisal Foundation (TAF)—for which he sits on the board of trustees—held a roundtable last spring to help foster greater communication and coordination among the BV professional organizations, as well as their constituents, so that “together, in the eyes of the regulators, we won’t have—as Jay Fishman calls it—‘tribal warfare.’”

Similarly, Sherman—who currently chairs the International Valuation Standards Board—noted that almost every U.S.-based valuation organization reached out to Beswick, expressing the hope that any future speech will reflect “meaningful, substantive change” from valuators. If not, Sherman fully expects the regulatory environment to tighten and raise the bar even higher for the valuation profession—perhaps by involving a valuation oversight board.

“Will there be a ‘PCAOB’ for the valuation profession?” Aaron asked. “If we fail to heal ourselves, then that could very well be.” In the meantime, “We want to be part of the solution, not the problem,” he said, noting TAF will be publishing a white paper on its spring roundtable soon. For his part, Sherman lauded the appointment of Sir David Tweedie as chair-elect to the IVSC’s board of trustees. Under Tweedie’s leadership, the IVSC is certain to be “a catalyst for the greater good of the profession.”

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