A group of CPAs has written an open letter to the American Institute of CPAs expressing opposition to the AICPA’s move to open up its Accredited in Business Valuation credential to non-CPAs.
The letter, posted Monday, complained that CPAs had little warning about the change to the ABV credential, which occurred when the AICPA Council voted last month at its spring meeting.
“Although the requirements to obtain the AICPA’s valuation credential have been revised several times since its inception in 1997, this new change represents the first time that the certification will be offered to non-CPAs,” said the 32 CPAs who signed the letter, many of whom have held prominent positions on AICPA committees and at state CPA societies. “Such a seismic shift in the AICPA’s original goals for the credential creates considerable professional risk to the reputations of AICPA’s CPA members and current ABV stakeholders who are CPAs. All AICPA members and stakeholders should have been consulted prior to this important change. The new qualifications to earn the ABV credential — specifically, making it available to non-CPAs — were not disclosed to those individuals to be impacted by the change before the change was put to a vote on May 22, 2018. This includes all AICPA members, all existing credential holders, CPAs as a whole, and the public. Prior to that time, disclosures as to the proposed change were made to only a limited few.”
They noted that business valuation services are vital to the economy and to the public that relies upon the results. They pointed to a recent industry report from IBISworld estimating the market for U.S. annual revenues from business valuation services at $3.9 billion. “The competency of business valuation services providers is crucial; a specialty certification is a signal of that competency,” they wrote.
The AICPA defended the move to open the credential to non-CPAs. “The importance of high-quality valuations across the entire financial ecosystem continues to be a focus for the AICPA,” said a statement forwarded by an AICPA spokesperson. “We believe that valuation professionals should be of the utmost quality as their work is relied upon regardless of whether they are a CPA. The CPA is a great foundation for the ABV credential, but we also recognize that many highly qualified accountants/finance professionals do not plan to perform audits and therefore elect not to pursue the CPA license. CPA/ABVs will still be able to differentiate themselves by holding the CPA license, which is recognized for integrity and objectivity. “
The AICPA believes there is greater demand for business valuation services, and non-CPAs are needed to fill the demand, with training from the AICPA.
“With an increasing demand for valuation services, the need for additional valuation professionals who would be held to the standard of excellence as established by the CPA profession became evident,” the AICPA added. “So, with careful consideration and approval from AICPA Council, the AICPA decided to extend eligibility for the ABV credential to qualified professionals who meet the high professional and educational standards, have the extensive requisite valuation experience, who pass the rigorous exam, adhere to the AICPA code of conduct and fulfill annual continuing education requirements. This will not [only] help maintain the high professional and valuation standards established by the AICPA, but it will help elevate the entire valuation profession. We believe that increasing the quality of valuations broadly will serve to protect the public interest through increased clarity, consistency and transparency.”
The embrace of non-CPAs isn’t only happening in the realm of business valuations. The AICPA announced earlier this month that it would be offering a certificate program in personal financial planning services to non-CPAs, with training similar to what it requires for its Personal Financial Specialist credential (see AICPA adds financial planning certificate program). However, the PFS credential itself will still only be available to CPAs.
Still, the CPAs and ABVs who signed the open letter believe the move is a mistake. “By neglecting to get input from the members and other affected stakeholders, the AICPA’s governing Council has deprived itself of necessary testimony and insights as to the importance of the ABV credential to the public and the potential lack of competency and integrity that the public would likely be subjected by the differing credential requirements for non-CPAs,” they wrote. “We urge AICPA’s governing Council and management to reconsider the change, be completely transparent in their actions, and listen to the concerns of their members and other stakeholders.”
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