By: Donald J. Schaffer, CPA/ABV, CVA
I apologize in advance for the numerous acronyms that follow. Unfortunately, they are the only shorthand available for some organizations with rather long names. But what do all these letters that you find strung together after the name of a supposed valuation expert mean?
There are many organizations that issue credentials for valuation specialists. The largest of these are the National Association of Certified Valuation Analysts (NACVA), the American Institute of Certified Public Accountants (AICPA), the American Society of Appraisers (ASA), and the Institute of Business Appraisers (IBA), each of which require a substantial commitment to education, testing and experience. There are dozens of other organizations that also issue credentials whose value cannot be readily determined. Some require nothing more than the payment of the requisite fee. With this veritable alphabet soup of credentials out there, how can you determine the qualifications of a valuation professional?
The National Association of Certified Valuation Analysts decided to risk its reputation by submitting itself for certification to the National Organization for Competency Assurance (NOCA). After a process of more than three and one half years that required extensive documentation of every facet of the certification program, NOCA has, through its National Commission for Certifying Agencies (NCCA) division, accredited NACVA’s two premier credentials, Certified Valuation Analyst (CVA) and Accredited Valuation Analyst (AVA).
The CVA credential, for which only CPA’s are eligible, and the AVA credential, for which other business school graduates may qualify, are issued only to candidates who have qualified by education, rigorous examination, and experience. Holders are required to maintain their skills through continuing education. NACVA offers an extensive menu of basic and advanced educational offerings, research, and library services to members.
When picking a valuation professional, carefully weigh not only the credentials, but the organization that issued the credentials. Then evaluate the experience of the professional in doing the type of project that you require. Then check references. Be sure you fully understand the quality and depth of the analysis to be performed when discussing pricing of the engagement. Poor quality valuation work, especially in tax, divorce, and business ownership matters that may lead to examination or litigation can have severe consequences.
Donald J. Schaffer, CPA/ABV, CVA heads the Business Valuation practice at CJBS, LLC. He began specializing in business valuations and first testified as an expert at trial in 1983. He was awarded a Certificate of Educational Achievement in Business Valuation in 1994 by the Illinois CPA Society, earned his CVA credential from NACVA in 1995, and was one of the first seven CPA’s in Illinois to be Accredited in Business Valuation by the AICPA