In a litigation trial, the process of qualifying the expert as an expert (capital “E”) in their field usually requires the expert to go through their credentials, training, experience, prior instances of qualifying as an expert, and anything else the court may find relevant.
Credentials are always an important determiner in whether an expert is an Expert, and particularly when testifying about business valuation matters, a field with many different credentials. Because accountants love their acronyms (CPA, anyone?) all of the credentials can sometimes blur together – CVA, AVA, CFFA, CFF, ABV, ASA, CBA, MCBA, and the list goes on. You can see, with just the small sample of credentials I’ve listed, why it can get confusing.
However, thanks to Business Valuation Resources, LLC’s newly published 2011/2012 Business Valuation Firm Economics and Best Practices Survey in June 2011, determining which credentials are most commonly held isn’t confusing.
The three largest organizations, the AICPA, NACVA and ASA, made up 75.8% of the credentials in 2010 up from 69.6% in 2008, with the largest gain being a 3% increase in the number of ABV’s (a business valuation credential promulgated by the AICPA). Most individuals hold more than one of the certifications as well. For example, I hold three that are listed on the chart – CPA, CVA, and CFF. Putting me in the company of 42.9% of my colleagues.
|What are the most common certifications in the business
valuation profession? Source: BV Wire Issue #104-3 – May 2011 published by Business Valuation Resources
|Certification||Certifying organization||% of total certifications 2010||% of total
|MBA (Master of Business Administration)||Multiple||10.1%||13.8%|
|CFE (Cert Fraud Examiner)||ACFE||4.8%||5.2%|
|CFA (Cert Financial Analyst)||ICFA||3.2%||4.1%|
|CFP (Cert Financial Planner)||ICFP||0.7%||0.7%|
The other question that sometimes arises is how do you compare these credentials? They all come from different organizations and have different criteria for obtaining them. All of the credentials have different testing and recertification requirements, yet they all have a common purpose – to educate professionals about acceptable business valuation techniques and provide assurance to the users of the professional’s expertise. Professionals may choose to obtain different credentials based on their career path not necessarily because one is “better” than another. For example, the CFA is a credential which is geared towards investment knowledge and many times portfolio managers seek this designation. The only way to compare them is to truly understand the different requirements for obtaining and keeping those credentials, which unfortunately is not an easy answer.
If you want to learn more about the requirements for the more commonly seen valuation credentials, you can link to the following:
CVA – Certified Valuation Analyst
AVA – Accredited Valuation Analyst
ABV – Accredited in Business Valuation
ASA – Accredited Senior Appraiser
CBA – Certified Business Appraiser
CFA – Chartered Financial Analyst