Choosing Your Expert: Different Credentials = Different Standards

11/17/2015 - By Zachary Farrington

Perhaps you’ve noticed the initials after the names of the valuation analysts with whom you work: ABV, CVA, CBA, MCBA, ASA and others. These letters represent credentials that the analyst has earned, proving his or her proficiency and competence in business valuation.

The credentials are offered by different organizations and each has slightly different requirements. Notably, each organization also has different valuation standards that it requires its members to follow.

For example, the American Institute of CPAs (AICPA) issues the Accredited in Business Valuation (ABV) credential. This requires all CPAs to adhere to the AICPA’s Statement on Standards for Valuation Services No.1 (SSVS1).

The American Society of Appraisers (ASA) issues the Accredited Member (AM) and Accredited Senior Appraiser (ASA) credentials. These credentials require adherence to the Uniform Standards of Professional Appraisal Practice (USPAP).

The National Association of Certified Valuators and Analysts (NACVA) issues the Certified Valuation Analyst (CVA) credential. Meanwhile, the Institute of Business Appraisers (IBA) issues the Certified Business Appraisers (CBA) and Master Certified Business Appraiser (MCBA) credentials. Both NACVA and IBA have their own business valuation standards.

Each organization requires specific education and relevant experience on the part of valuation analysts and administers a lengthy, rigorous exam. Each also requires continuing professional education to ensure that members stay current in valuation trends and topics.

As someone who works with valuation professionals, what should you make of all of these acronyms? The organizations’ standards are different, but not vastly so. Some organizations permit certain types of reports, while some use different nomenclature. Most financial professionals would agree that the various credentials all show a clear dedication to the practice of business valuation, and indicate a high level of professional competence and conduct.

Generally, the differences matter because, as they do their valuation work, credentialed professionals must apply the standards of the organization by which they’ve been accredited. At Saltmarsh, our valuation and litigation support team includes professionals who hold the ABV, CVA, CBA, and AM designations. We strive to ensure that our reports satisfy a broad range of requirements and the accepted industry standards.

If you have questions about standards, education, or credentialing in business valuation or any other arena in the accounting universe, please do not hesitate to give one of our experienced professionals a call.