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Ethics Oversight Board Message—Second Quarter 2017
Professional Oversight—NACVA’s Monitoring Process
Paul Wonch, MBA, CPA, ABV, CVA, MAFF
Past Chair NACVA’s Ethics Oversight Board
If you are a new NACVA member or maybe even if you are not so new, you may not know how we monitor ourselves to make sure we follow our professional standards. As a member of the NACVA’s Ethics Oversight Board (EOB) for the past three years, and its Chair in my last year, I have learned a lot about our monitoring process. Prior to my involvement with the EOB, I was somewhat unaware of what all is involved.
What I learned is that there is a fairly thorough and extensive formal procedure in place. For the sake of brevity, I will only touch on some of the more interesting aspects of the process in this article. To learn the details, you can find the NACVA Ethics Oversight Board’s Policies and Procedures Manual at www.NACVA.com/Standards.
The approach is primarily a complaint and complaint resolution process. Consequently, it formally begins with a complaint filed by anyone who believes a NACVA member has potentially breached NACVA’s ethical or professional standards. It could come from a potentially injured party, a regulatory body, an attorney, another NACVA member, etc. A complaint is filed by completing the complaint form, which can be found at www.NACVA.com/Standards, and submitting it to the Executive Director of NACVA.
The Executive Director submits the complaint to the EOB. The EOB decides whether or not to initiate a formal investigation. The standard used to decide if an investigation will be initiated is to determine if a violation of NACVA’s standards may have occurred. This is a fairly low bar to justify an investigation. Note, even if it is unclear that standards have been violated, as long as they may have been violated, our process requires an investigation.
An investigation will be deferred if a case is subject to litigation or is under investigation by a governmental regulatory body. We do not want our process, in any way, intertwined with the legal process or a government investigation. When the litigation, any related appeal, or the government investigation is over, a deferred investigation can begin.
Once an investigation has been deemed necessary, and no litigation or government investigation is pending, investigators are assigned to a case, letters are sent to the individuals involved, information is gathered and reviewed, and the appropriate people are interviewed. The investigators present their findings and recommendations to the EOB. A final decision is made by the EOB regarding the existence and nature of any violation. If the EOB determines that no violation has occurred, the case is closed and the appropriate parties are notified. If it is determined that a violation has occurred, the EOB decides on appropriate disciplinary action.
There are four levels of disciplinary action: 1) admonishment, 2) remediation required, 3) suspension, and 4) termination of credential/membership. Admonishment occurs when the least significant violation is found and it is included in the member’s record. A letter of admonishment may be issued. Remediation is required for a more significant violation and typically involves additional coursework or training for the violator. Suspension occurs for even more significant violations when the violation does not merit termination. Termination occurs when a violation is so significant that it materially misrepresented or resulted in a material error in conclusion/opinion, or the case was a blatant disregard for NAVCA’s professional standards.
All findings and recommendations in cases with violations must be presented to and approved by the NACVA Executive Advisory Board (EAB) and the NACVA Board of Directors. Once the conclusions are approved by these two bodies, the member in violation is notified. The member has the option to appeal the findings and recommendations. An appeal is reviewed by the EAB. If there is no appeal, the EOB proceeds with the corrective action.
Keep in mind that the members of the EOB are all practitioners who are very sympathetic to the difficulties of meeting professional standards in all circumstances. If a complaint is made about you, it is not necessarily the end of the world. Your cooperation will provide the best outcome for you. My experience on the EOB reinforced my view that while NACVA takes its professional standards very seriously, it is a supportive member-focused organization dedicated to its members’ success.
Paul Wonch, MBA, CPA, ABV, CVA, MAFF
Wonch Valuation Advisors, LLC
3905 Vincennes Road, Suite 303
Indianapolis, IN 46268