The International Valuation Standards Council has released a guide that aims to raise awareness of audit procedures among professional valuers in response to heightened scrutiny by regulators of valuations.
The IVSC noted that valuations have a significant impact on a company’s financial performance, and in recent years there has been increasing concern amongst regulators about not only the quality of valuation estimates provided by management, but also the degree of scrutiny of those estimates during the audit process.
The new guide tries to ensure that the services provided by professional valuers will enable company management to include high-quality valuation estimates in financial statements alongside an audit to adequately assess those estimates.
“The IVSC’s new guide has been developed to assist professional valuers operating in the financial reporting arena, either when engaged by a reporting entity or an auditor, in gaining a greater understanding of the audit process,” said IVSC Professional Board chairman Greg Forsythe in a statement. “By ensuring that the initial valuation is fit for purpose and that there is a proper dialogue between all parties involved, many of the problems commonly identified can be resolved.”
To compile the guide, the IVSC consulted with professional organizations, valuation providers, preparers of financial statements and auditors to make it more useful to the various interested parties in the audit process relating to valuation estimates, including audit committee members.
The guide is available at http://www.ivsc.org/products.