The following major elements are required in the statement on standards for valuation services
(SSVS):
Professional Competence – A valuation analyst should have a solid understanding of valuation
principles and theory, as well as the ability to identify, gather, and analyse data, consider, and apply
appropriate valuation approaches and methods, and use professional judgment in developing a
value estimate (AICPA, 2007).
Establishing an Understanding with the Client – The valuation analyst should establish an
understanding with the client, and whether it is written or oral, the valuation analyst should modify
the understanding if circumstances arise during the engagement that necessitate doing so (AICPA,
2007).
Objectivity and Conflict of Interest – The principle of objectivity imposes the obligation to be
impartial, intellectually honest, disinterested, and free of conflicts of interest. Where a potential
conflict of interest exists, a valuation analyst must make the required disclosures and obtain
consent under the "Conflicts of Interest" interpretation (AICPA, 2007).
Professional Competence – In order to provide services to a client one needs the knowledge and
skills for the given task (AICPA, 2007). All interactions and services should be provided in a
professional manner with the valuation analyst using their resources to approach the problem in an
efficient manner.
Objective and Conflict of Interest – Providing service should be free from bias, and remain honest
(AICPA, 2015). c Remaining uninterested personally creates the ability to create a valuation
objectively.
Establishing an Understanding with the Client – A valuation analyst needs to provide a clear
understanding with the client traditionally in writing. The written understanding should include the
purpose, the objective, and the nature of the valuation (AICPA, 2007). Having a clear understanding
provides clarity to both parties on expectations.
The standards provided but the SSVS fall in line with the other standard-setting bodies by providing
guidelines to affectively conduct business in an appropriate manner. The focus on honest reporting
with valuations based on documentation and proper analysis is comparable to the guidelines from
the other standard-setting bodies.
References:
AICPA.org. (2007, June). Statement on standards for valuation services (VS Section 100). AICPA.org.
Retrieved from https://www.aicpa.org/resources/download/statement-on-standards-for-valuation-
services-vs-section-100
AICPA statement on Standards for Valuation Services No. 1, valuation of a business, business
ownership interest, security, or intangible asset. (2015). Business Valuation and Bankruptcy, 179–
254. https://doi.org/10.1002/9781119198291.app1
