Magazine article The CPA Journal

How Does the Push for Ethics and Accuracy Affect Valuations and Appraisals?

Magazine article The CPA Journal

How Does the Push for Ethics and Accuracy Affect Valuations and Appraisals?

Article excerpt

Despite the emphasis on ethics and accuracy in the current business environment, opportunities for creativity and artistry remain when it comes to valuations and appraisals. Despite increasing demands for standardization, valuation remains more an art than a science. For example, artistry requires using new technology, such as digital dictation that allows valuators to get through a plant in less time than previously required. Other technology allows for gathering more data, such as high-quality digital pictures. In addition to demonstrating a certain level of artistry, such technological developments also increase accuracy. Wireless technology enables a valuator or appraiser to begin research even before returning to the office.

Technology has also made appraisers and valuators less reliant on databases. For example, before the advent of computer software like Microsoft Excel, appraisers and valuators had to write multicategory programs. Likewise, the quality of market analysis research continues to improve because enormous amounts of data are now available online.

Available Standards

The Uniform Standards of Professional Appraisal Practice (USPAP) are the generally accepted standards for professional appraisal practice in North America. While USPAP attempts to provide a standardized framework for appraisal, how an appraiser interprets a case in light of the standards remains variable. Following USPAP does not guarantee that different appraisers will no longer arrive at very different values, because it allows for a wide range of definitions and interpretations. …

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