PricewaterhouseCoopers has just joined the rest of the Big Four firms in officially sponsoring the work of the International Valuation Standards Council, which aims to create globally recognized and accepted valuation standards, particularly for financial instruments, and promote quality within the valuation profession.

“We help public companies with valuation matters relating to their financial reporting,” said John Glynn, U.S. and global valuation services leader for PwC.

PwC sold its valuation practice in 2001, a year before the Sarbanes-Oxley Act was passed by Congress, but as it saw valuation increasingly moving in the direction of fair value accounting, the firm began to rebuild the practice from scratch in 2006. PwC’s valuation practice works with colleagues in the auditing practice who need to audit fair value measurements and supports them by providing valuation opinions.

One of the key reasons for PwC’s support for the IVSC was the involvement of Sir David Tweedie, the former chairman of the International Accounting Standards Board, who now chairs the council (see Tweedie Hopes to Internationalize Valuation Profession).

“We know him very well as a firm,” said Glynn. “We understand Sir David Tweedie and have a lot of confidence in him and agree with his objectives.”

As a sponsor, PwC will provide financial support to the organization and actively contribute to the development and revision of the IVSC’s International Valuation Standards and the advancement of its roadmap for a high-quality professional framework around the world.

As the IASB and the Financial Accounting Standards Board started moving more toward fair value accounting and fair value measurement in the wake of the financial crisis, that highlighted the need to have a valuation community that would be able to assist them.

Glynn believes that the people who are advising clients on fair value issues need to be held to high-quality standards. There should be a way to license valuation professionals, provide standards akin to auditing and accounting standards, as well as offer quality review checks so if someone is wrong with their valuations, there is a way to correct them.

Glynn pointed to the work of the Private Company Council in honing FASB’s standards for goodwill impairment for private companies. “The old impairment test creates a lot of complexity,” said Glynn. “You need to get some help with the valuation. Do you have the valuation people with the right quality in place to take a lot of the back and forth out of the system?”

He argued that unless more stringent valuation standards are available, the government may eventually step in. He noted that SEC chief accountant Paul Beswick has already urged action on valuation. “If it’s not put in place pretty quickly, at some point the government will step in,” Glynn warned. “The SEC is running short of patience on resolving these issues.”