How Do I Know If My Valuator Is Qualified? A New Exposure Draft Explores the Topic

On January 5, 2026, The Appraisal Foundation published an Exposure Draft that seeks to “assist stakeholders in recognizing the attributes of a competent appraiser.” The Exposure Draft focuses on defining competency and provides methods of indicating whether a business appraiser can competently appraise a given company or security. While the Exposure Draft is far from perfect in its current form, it does offer useful narrative about valuator competency worth discussing.

Accreditation

First, the Exposure Draft states that accreditation alone does not guarantee competency; however, it can be a useful starting point for determining competency. There are several designations within the business appraisal industry that can be used as indicator of potential competence. In the U.S. market, the primary valuation-related accreditations are: Accredited in Business Valuation (ABV), Certified Valuation Analyst (CVA), Accredited Senior Appraiser (ASA), and Chartered Financial Analyst (CFA).

Notably, the Certified Public Accountant (CPA) and Certified Financial Planner (CFP) are not valuation-specific designations and so professionals with only those designations may not possess foundational knowledge of valuation theory or may not have sufficient relevant experience. An advantage that comes with working with a professional holding a valuation designation is that they are bound by the designation’s general and ethical standards, reporting standards, and continuing education requirements. These standards and ongoing educational requirements are directly related to valuation practice.

Experience

Another consideration mentioned by the Exposure Draft is the type and depth of a valuator’s experience. The type of experience is important because an excellent transaction support consultant may not be able to provide litigation support at the same level of quality. Individuals seeking a valuation professional should determine if the valuator has the requisite experience necessary to understand the specific business structure of the asset being valued. If the experience is lacking, then determine if the valuator can reasonably attain competence. The Exposure Draft states that “more experience often means that an appraiser has good familiarity with the valuation methods and judgements required to perform the assignment.” While this certainly can be true, long tenure can also serve as a double-edged sword. Be careful that long tenure has not resulted in the utilization of outdated valuation techniques.

Tools & Resources

The Exposure Draft also touches on technology, stating that “software does not enhance an appraiser’s competency… Tools or software can contribute to accuracy and, in some cases, provide empirical or implied evidence that the appraiser may have otherwise overlooked. However, the appraiser remains responsible for understanding and evaluating these calculation tools and research sources.” If it appears as though a value is a software-generated output, ask questions to ensure that valuator understands and can explain the software’s output and that the underlying assumptions are consistent with the business or security’s fundamentals. While reliance on software can be dangerous, the Exposure Draft may be understating the importance of technology. The use of certain models, especially Excel or Python-based, can add a degree of precision and sophistication to security valuation, which cannot be easily attained through manual calculation. The critical factor is the valuator’s understanding of the model inputs, outputs, and method of calculation.

Finding a Qualified Valuator

Selecting the right business appraiser is crucial for transaction due diligence, estate planning, ESOP compliance, and more. A poorly performed business valuation can result in nightmare scenarios where an individual overpays for a company, sells a company for less than it is worth, overpays their estate transfer taxes, leaves an ESOP insolvent, or they may find themselves involved in litigation. When selecting a business valuator, it is recommended that one determines if they have a valuation-related designation, consider if they have the necessary relevant experience specific to the subject ownership interest, and determine if they understand the technology to be utilized. Doing this will greatly increase the likelihood that the individual is qualified to perform the required services.

At McKonly & Asbury, we have extensive experience within the valuation industry. You can visit our Business Valuation Services page for more information. Should you have questions please don’t hesitate to contact T. Eric Blocher CPA, ASA, CVA.

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