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

A registered valuer is appointed to value the shares of Kaveri Textiles Ltd. for a preferential allotment. Which of the following conduct points is consistent with the valuer's code of conduct under the Registered Valuers Rules?

The valuer must act independently, without bias, and disclose any interest or conflict to the appointing party. Reducing the fee does not remove a conflict, tailoring the value to the promoter violates objectivity, and signing unsupervised delegated work breaches the duty of due care.

  1. AAccept the assignment even though the valuer holds a material interest in the company, if the fee is reduced
  2. BConduct the valuation independently and without bias, and disclose any interest or conflict to the appointing partyCorrect
  3. CShare the draft valuation findings with the promoter and adjust them to the promoter's preferred figure
  4. DDelegate the full valuation to an unregistered junior without supervision and sign the report

Explanation

The code requires independence, integrity and disclosure of conflicts of interest. A lower fee does not cure a conflict, adjusting the value to the client's wish breaches objectivity, and signing unsupervised delegated work breaches due care.

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