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CMA Final · Strategic Performance Management and Business Valuation · Laws and Compliance in Business Valuation

A company's registered valuer is appointed to value a preferential allotment of shares of an unlisted company. Which of the following would most clearly breach the valuer's compliance obligations under the Registered Valuers Rules?

Accepting the assignment while holding an undisclosed direct financial interest in the company breaches the independence and disclosure duties of a registered valuer. Working within the registered asset class, documenting assumptions and following adopted valuation standards are all expected compliant conduct.

  1. AValuing the asset class for which the valuer is registered, using a recognised method
  2. BAccepting the assignment while holding a direct financial interest in the company being valued, without disclosureCorrect
  3. CRecording the basis and assumptions in the valuation report
  4. DFollowing the valuation standards adopted by the RVO

Explanation

The valuer must be independent and must disclose any interest or conflict, and should not undertake a valuation where a conflict exists. The other three options are expected conduct: working within the registered asset class, documenting the basis and assumptions, and following the adopted valuation standards.

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