Centre of Valuation & Financial Reporting

The Center for Valuation and Financial Reporting addresses two Grand Challenges – valuation and financial reporting – where IICA aims to develop world-class edge. As part of this endeavor, the IICA wants to create professionals valuation practitioners, in addition to independent directors and insolvency practitioners. The Australian Council of Professions (2003) defines a professional as,

A Profession is a disciplined group of individuals who adhere to ethical standards and who hold themselves out as, and are accepted by the public as possessing special knowledge and skills in a widely recognized body of learning derived from research, education and training at a high level, and who are prepared to apply this knowledge and exercise these skills in the interest of others.

Valuation

The valuation profession has a long history in India, probably of about a century. It has been primarily driven by users of valuations services. Different statutes - banking, securities, tax, company, insolvency - require valuation for a variety of purposes. The users generally focussed on demand side - what needs to be valued, who can render valuation services and the manner of such valuation. They did not focus on supply side of valuation services. The self- regulating valuation professional organisations (VPOs) have generally tried to build expertise to meet the needs of users.

Valuation is an interdisciplinary study that draws upon engineering, law, economics, statistics, finance, and accounting. The Valuation Centre will have the role in capacity building of valuation practitioners –

(i)national valuation programme, a four-year integrated full-time professional course, which includes an internship of one year, if he has passed class higher secondary examination;

(ii)graduate valuation programme, a two-year full-time professional course on valuation, which includes an internship of one year, if he has a degree or equivalent qualification in any of the identified disciplines relevant for an asset class; or

(iii)limited valuation programme, a four-hundred-hour professional course, if he does not have relevant qualification, but has been rendering valuation services as a Valuer for at least five years. The eligibility through this programme shall be available only for two years.

Financial Reporting

There is no universal model for an independent audit oversight body and it is important to recognize the unique characteristics of a country’s legal and regulatory framework and capital markets when determining what form an oversight body should take. It is therefore essential to see any new oversight body in the context of the overall regulatory environment, including counterparts that oversee other aspects of financial reporting, such as corporate governance and financial statement preparation - for example the Securities and Exchange Board of India (SEBI).

The IICA and NFRA have entered into an MoU on 18 March 2019. The MoU provides for capacity building services, research and operational support and to undertake any other activity in areas mutually decided by the two institutions from time to time. The IICA will draw upon the experience of other oversight bodies around the world, such as Australia, Canada, the Netherlands, Singapore, the UK and the US. The choice of these examples is based on the adoption of the International Federation of Independent Audit Regulators (IFIAR). The core elements of effective independent audit oversight, as set out in the IFIAR Core Principles, as a basis for determining a suitable model for establishing or enhancing an independent audit oversight body.

Over time the IICA will use more and more of technology to assist the NFRA to perform its role. The technology will enable the NFRA to organize training in completely simulated environments.

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    Last Updated:- 31/05/2020
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