Advocacy News Archive 

The FVS Section serves as the voice of CPAs who provide forensic and valuation services by promoting and protecting member interests with regulators and other third parties. With the assistance of other groups and volunteers, the FVS Team has actively monitored the issues below.  Please email us with any questions, concerns or suggestions.


Advocacy News Archive
United States Department of Labor's Proposed Changes to the Definition of the Term "Fiduciary" (Continued from the Advocacy Homepage) 

A stack of books represent the United States  Department of Labor's proposed changes to the definition of the term "Fiduciary"The Department of Labor (DOL) proposed a rule to change the definition of the term "Fiduciary" which was published in the October 22, 2010 Federal Register to include virtually all valuations prepared for benefit plans. Certain aspects of the proposed rule would inappropriately include persons providing appraisal and valuation services (such as to an Employee Stock Ownership Plan (ESOP) under the term “Fiduciary” by redefining the longstanding definition of “Investment Advice.”

April 12, 2011:
The AICPA FVS Executive Committee issued a second
comment letter on the DOL’s proposed rule on definition of the term “Fiduciary” which was updated in the Federal Register on March 8, 2011. The DOL revised the proposed definition of the term “Fiduciary” such that valuations that are performed for DOL or Internal Revenue Service (IRS) reporting would be excluded from the definition. The FVS Executive Committee’s comments reiterated its recommendation that the DOL require valuation analysts to meet minimum qualification requirements and follow professional standards to ensure the quality of the valuation.

March 2, 2011:

Robert Reilly, CPA/ABV/CFF, member of the AICPA's FVS Executive Committee, testified against proposed changes to the definition of 'Fiduciary' at the U.S. Department of Labor Employee Benefits Security Administration hearing.

His testimony discussed the fact that many CPAs perform business valuation services for many employee benefit plans, and that “treating the sponsor company valuation analyst as a fiduciary will be disadvantageous to benefit plan participants.” Reilly’s testimony highlighted four significant concerns with the proposed change:
  • “The proposed change to the definition is incompatible with the Internal Revenue Service’s requirements for an independent appraisal of employer securities."
  • “The proposed change does not address the underlying issue of proper qualifications and standards for performing valuation services."
  • “The proposed change will increase the cost of valuation services for ESOP plans."
  • “The proposed change will restrict the number of valuation specialists willing to do valuations for ESOP plans.”

January 25, 2011:

The AICPA FVS Executive Committee submitted its first comment letter opposing this change stating that the DOL should not change the definition of the term "Fiduciary", rather the DOL should implement rules to ensure that only qualified individuals prepare valuations for benefit plans and that those qualified individuals follow recognized valuation standards.

For the most recent updates, visit the Advocacy Homepage.
Appraisal Standards Board's Proposed Changes to the Communication and Reporting Requirements of USPAP

The Appraisal Standards Board proposes changes to the communication and reporting requirements of USPAPThe AICPA FVS Executive Committee issued a comment letter in response to the Appraisal Standards Board's proposed changes to the 2016-17 edition of Uniform Standards of Professional Appraisal Practice (USPAP) on February 13, 2014. The most recent comment letter reiterated the AICPA's position that the proposed changes would have a significant impact on AICPA members who comply with USPAP. Read the FVS Executive's most recent comment letter to learn more.

These comments are in addition to previous comments issued on July 16, 2012 and November 14, 2011 in response to the to the Appraisal Standards Board's proposed change to the communication and reporting requirements of the 2014-15 edition of USPAP.   The proposed change would directly conflict with Rule 26 of the Federal Rules of Evidence and have a significant impact on appraisers who work in a litigation environment.  Under Rule 26, valuation analysts do not need to keep copies of draft reports or to disclose copies of draft reports to opposing litigants or opposing counsel.

Please note that AICPA does not require its members to comply with USPAP. Members must be aware of standards of other professional organizations to which they must comply.

CPAs Gain Statutory Exemption from Red Flags Rule

A stack of books represent the CPA Statutory Exemption from Red Flags RuleFollowing years of advocacy efforts and a legal battle, CPAs received a permanent exemption from the Federal Trade Commission’s Red Flags Rule with President Barack Obama’s signing of the Red Flag Program Clarification Act of 2010 on Saturday, December 18, 2010.

In 2003, Congress passed legislation (Fair and Accurate Credit Transactions Act, or “FACTA”) intended to curb identity theft.  Pursuant to this legislation, the FTC issued, on November 9, 2007, a "Red Flags" rule  that requires “creditors” or “financial institutions” with “covered accounts” to implement a written identity theft prevention program to detect warning signs of identity theft in their day-to-day operations. Enforcement of the rule has been postponed numerous times—most recently until Dec. 31, 2010—since the original Nov. 1, 2008, effective date.

“The AICPA is pleased Congress passed and the president has signed into law S. 3987, the Red Flag Program Clarification Act of 2010, amending the Fair Credit Reporting Act,” said AICPA President and CEO Barry Melancon in a statement. “The AICPA, with help from state CPA societies nationwide, worked tirelessly on this issue. The bill makes clear that CPAs and CPA firms are not classified as ‘creditors’ for the purposes of the FTC’s Red Flags Rule. CPAs and CPA firms often do not receive full payment from clients at the time services are rendered. That is not the same as a financial transaction like bank loan or a credit card where ID theft is a risk. This legislation makes clear that a CPA's billing cycle isn’t an identity theft risk. This legislative fix to a burdensome regulation is a positive development in Washington.”

While CPAs may be exempt from the Red Flags Rule, their clients may not be. Access information on the Red Flags Rule which may be helpful when assisting clients.


 Comment Letters

Aug. 31, 2012          AICPA Letter on Valuation of Customer Related Assets
Aug. 9, 2012 AICPA President's Letter Supporting Bill that Exempts Valuation Analyst from the Definition of Fiduciary Under ERISA
July 20, 2012 AICPA Letter on Proposed Changes to the 2014-15 Edition of USPAP
Nov. 14, 2011 AICPA Letter on USPAP Changes
April 12, 2011 FVS Executive Committee's Second Letter to the Department of Labor
Jan. 25, 2011 Department of Labor's Proposed Changes to the Term "Fiduciary"


Sept. 20, 2012 Another Voice Financial Experts on Reducing Client Costs in Civil Litigation


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