Three of the many major requirement's in the statement on
standards for valuation services (SSVS) are:
1) Professional Competence - "A valuation analyst should possess a
level of knowledge of valuation principles and theory and a level of
skill in the application of such principles that will enable him or her to
identify, gather, and analyze data, consider and apply appropriate
valuation approaches and methods, and use professional judgment in
developing the estimate of value" (AICPA.org, 2015).
2) Objectivity and Conflict of Interest - "The code requires
objectivity in the performance of all professional services, including
valuation engagements" (AICPA.org, 2015). This means that a
valuation analyst must be free from conflicts of interest, and must
remain objective and uninterested personally in the valuation itself.
3) Establishing an Understanding With the Client - "The valuation
analyst should establish an understanding with the client, preferably
in writing, regarding the engagement to be performed. If the
understanding is oral, the valuation analyst should document that
understanding by appropriate memoranda or notations in the
working papers." (AICPA.org, 2015). The analyst must then modify
the understanding if they encounter unforeseen circumstances
during the engagement that make it appropriate to do so.
SSVS standards seem to be in line with other standards that are set
my standard-setting bodies like the International Accounting
Standards Board (IASB) and the US Financial Accounting Standards
Board (FASB) in that they set guidelines to make sure consistent,
honest, and accurate reporting is done on behalf of the valuation
analyst.
References:
Statement on standards for valuation services (VS Section 100).
AICPA. (2015). Retrieved June 27, 2022, from
https://www.aicpa.org/resources/download/statement-on-
standards-for-valuation-services-vs-section-100
