NACVA Creates New 'Advisory Briefs' and Issues the First One on 'The Use of Artificial Intelligence and Machine Learning'

Parnell Black, NACVA’s co-founder and CEO, has announced that NACVA has issued its first Advisory Brief on “The Use of Artificial Intelligence and Machine Learning.” This is the first such AI advisory from the major business valuation organizations.

In Parnell’s words, “the concept of the Advisory Brief was born. We expect this platform will be used to provide guidance in a number of areas and coming from all our boards and commissions, but not with the intent of shackling our members with rules and regulations, must do’s and should do’s, but with thoughtful perspective that helps members get a better sense for how a consensus of thought leaders view certain matters pressing upon the profession.”

Specifically:

An Advisory Brief provides non-authoritative guidance to the Association's credential designees and membership. It is issued by NACVA’s boards, commissions, task forces, teams, or committees and represents the perspective of a formal body within the Association. It offers additional insights that members may utilize or build upon. (See Disclaimer of Published Information) Should a member wish to seek additional information, they can submit their request via e-mail to the Chair of NACVA’s Executive Advisory Board (EAB), who will direct it to the appropriate body.

The new Advisory Brief on AI is concise (only two pages) but adequately gets the point across and provides guidance for its members. There will be other Advisory Briefs on other topics in the future, but, in my opinion, this one is well thought out and accomplishes its mission.

NACVA ADVISORY BRIEF: The Use of Artificial Intelligence and Machine Learning

“This brief advocates for a thoughtful integration of AI and ML within the frameworks of professional valuation and/or forensic practice,” according to its introduction. It notes that constituents can leverage AI and ML technologies to augment but not to replace their expertise. 

In Section 2, the brief provides a needed definition of professional judgment as follows:

Professional judgment when incorporating AI and ML into an assignment refers to the constituent's capacity to make informed decisions grounded in knowledge, experience, education, training, and skills.

Section 3, on ethical considerations, instructs constituents who “[incorporate] AI and ML into an assignment must consider NACVA Ethical standards and considerations, particularly concerning confidentiality, data integrity, and non-discrimination.”

Section 4, on verification and reporting, notes that, “[w]hen incorporating AI and ML technologies, it is essential to verify the AI and/or ML outputs are not misleading.” It also points out that the analyst should disclose the use of AI and/or ML and that it was used in an ethical manner using professional judgment and due diligence.  Exhaustive disclosure is not intended.

Finally, in Section 5, the constituents are exhorted to remain abreast of technologies and methodologies and actively participate in professional development opportunities.

Being first is not often easy, but I personally believe that NACVA has taken a good lead on this important area.