Society Objects to ABV Credential for Non-CPAs

By:
Chris Gaetano
Published Date:
Jul 31, 2018

iStock-882501436 Business Valuation
The NYSSCPA, in a July 25 comment letter, voiced its deep concern over the recent decision by the American Institute of CPAs (AICPA) to open the Accredited in Business Valuation (ABV) credential to finance professionals generally, not just CPAs. In the letter, drafted by members of the Society’s Business Valuation Committee, the Society decried the negative impact the decision will have on the value of the credential and on CPAs who possess it.

First developed in 1998, the ABV credential has been available only to CPAs as a way to signal further specialization in the field of business valuation. In May, however, the AICPA Council voted unanimously to open a second path to the credential that does not require CPA licensure. The AICPA said that the move would help “promote consistency, quality and transparency in the valuation marketplace” by making sure that “both CPAs and financial professionals will follow the same professional ethics and valuation standards as they perform business valuations, helping firms to manage risk and provide reliable service to clients.” In this respect, it believes that offering the credential to non-CPAs is a positive development.

The Society, however, vigorously disagrees with that notion. In its letter, addressed to Jeannette Koger, vice president for advisory services and credentialing at the AICPA, the Society argued that, for years, the ABV credential has been promoted as a way for members to gain, through time and effort, a distinctive mark of excellence. That all ABVs must also be CPAs was a “hallmark of the credential” that conveyed “a unique combination of independence, knowledge, experience and integrity to the public and regulatory agencies.” Offering the credential to non-CPAs, said the Society, represents an unacceptable dilution to this characterization, promoting a perception that non-CPAs are interchangeable with CPAs for the purposes of business valuation engagements.

“The message imparted by this change is that CPAs do not possess a distinctive competitive advantage over non-CPAs and that ABV credentialed CPAs belong to a homogenous group of business valuation professionals with myriad similar credentials, to be selected using common metrics such as price and convenience, rather than reputation and high-quality professional standards,” argued the Society.

Jean Han, the chair of the Business Valuation Committee and one of the comment letter’s principal drafters, said that the change devalues CPAs and ignores all the ways that their knowledge and training as CPAs enhance their business-valuation work—ways that non-CPAs can’t match.

“We believe CPAs bring to the table added professionalism and integrity,” she said. “All that adds a competitive edge as professionals, practicing in this arena. There are many people who do what we do, and we had this extra advantage as a CPA, but [with the AICPA] making the rules murky, we’re not enjoying that benefit anymore.”

She said that her committee is in communication with its counterparts at other state societies in order to promote a larger, nationwide effort to convince the AICPA to reverse its decision.

Gilbert Nielsen, an AICPA representative, reported that “CPA/ABVs will still be able to stand behind the CPA in the services they provide and in litigation settings. The AICPA will provide a logo that maintains the CPA/ABV relationship.” He also referred to a letter written by Susan S. Coffey, executive vice president of public practice at the AICPA, in response to a letter sent by CPA/ABV holders opposed to the change. Coffey wrote that the opponents’ letter “provided us with the opportunity to reflect on the importance of reaching out to more members to complement committee diligence. … That said, I do want to point out that there is a lot of support for this decision within the profession.” She explained that, over a three-year process, more than 300 professionals in AICPA governance roles engaged in discussions and shepherded the proposal through layers of approval.

cgaetano@nysscpa.org

 

 

 

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