This Comment Letter was sent by BDO Global Coordination B.V. on behalf of BDO International, to Ms Tissier at International Valuation Standards Committee on 13 March 2007:
Dear Ms Tissier,
Proposal for the Restructuring of the IVSC
We thank you for the opportunity to comment on the above proposal, issued by the Governance Group of the International Valuation Standards Committee (“IVSC”). We should like to make the brief observations below, on behalf of BDO International1.
We broadly support the proposed restructuring, strengthening and expansion of the IVSC. We believe that it will facilitate the achievement of the stated goals, i.e. that International Valuation Standards (IVSs) and the delivering organization be both relevant and sustainable.
While the proposed structure should lead to better governance and wider credibility, we do have the following concerns: - It is proposed that the Board of Trustees, which will have an oversight role, will appoint a Nominations Committee to facilitate the population of the International Valuation Standards Board (“IVSB”) and the International Valuation Professional Board (“IVPB”). However, the Nominations Committee will also appoint future members of the Board of Trustees, as vacancies occur. This would seem to be a potentially “incestuous” relationship.
- In order to ensure the required level of technical expertise, we believe there must be representation on the various bodies from both the accounting and valuation professions, in particular on the IVSB.
For these reasons, we recommend that the proposal is expanded to explain more explicitly the qualifications to be a member of the Nominations Committee or the Board of Trustees. We further recommend that a balanced representation (i.e. incorporating accounting and valuation professionals) of these groups, as well as the IVSB and IVPB, is essential.
We expect that it may be a challenge to create IVSs applicable to all interest groups. The valuation needs and objectives of the business community and market regulators often differ from the needs and objectives of those requiring valuations for purposes of tax compliance services or other areas such as divorce or litigation. Any set of standards aiming to apply to each and every valuation may end up being written at the most basic level. In its future deliberations of how best to achieve its goals, we believe the IVSC (or the proposed IVSB) should consider the desirability of formulating a subset of IVSs that is applicable only to valuations performed for financial reporting purposes.
In addition, given the increasing importance of valuations in today’s financial reporting models, we believe the IVSs should include a focus on quality control and competency/educational/experience requirements.
We hope that the restructure will lead to universal recognition of the IVSC (or the proposed IVSB) as the global standard setter, a strengthened valuation profession, and high-quality standards covering the entire, broader valuation professional base.
We would be pleased to discuss our comments and observations with you further if this would be helpful. Please contact Helen Thomson of BDO Global Coordination B.V. on +32 2 778 01 30.
Yours sincerely,
BDO Global Coordination B.V.
1BDO International is a world wide network of public accounting firms, called BDO Member Firms, serving international clients. Each BDO Member Firm is an independent legal entity in its own country.
The network is coordinated by BDO Global Coordination B.V., incorporated in the Netherlands, with an office in Brussels, Belgium, where the Global Coordination Office is located. |