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Ethics Oversight Board (EOB) Message—Fourth Quarter 2017

NACVA Association News

Margaret McDonnellSomeone Has Filed a Complaint Against You With NACVA…Now What?

Margaret McDonnell, CPA, ABV, CFF, CVA
NACVA Ethics Oversight Board Member
Vermont NACVA Chapter President
McDonnell Tax & Consulting, PLLC
1131 Sharpshooters Road
Moretown, VT 05660
(802) 279-7603

Anyone who has been a NACVA member for more than one day knows Pam Bailey.  She is our beloved Executive Director and an icon at NACVA.  She is also an Executive Advisory Board (EAB) member and an Ethics Oversight Board (EOB) advisor.  She is a cheerful person and always has time to say hello.

But no one wants to get a letter from Pam Bailey in her capacity as EOB liaison.  Pam is the person responsible for the initial notification to NACVA members of a complaint filed against them.  She passes the complaint and notification letter over to the EOB, and the process begins.  This article explains the process and compares it to other valuation board processes.

The NACVA EOB is one of five boards created to maintain Association activity in critical areas of the profession.  The EOB has eight board positions, six of which are elected and the others assigned by the EAB.  All eight members have voting rights and serve three-year terms.

New complaints are distributed to EOB members and discussed at the next regularly scheduled monthly meeting.  The EOB determines, by vote, whether the complaint merits additional investigation and/or information from either the complainant or the NACVA member.  If so, a two-member team is selected to manage the information gathering.

If the EOB determines that NACVA standards were violated, it next determines what disciplinary action to take.

Many times, a NACVA member inadvertently commits an ethics violation or does not realize a particular action has crossed the threshold.  The EOB works with the member to correct the action and proposes a remediation plan that includes education, review of future reports, or both.  In extreme cases, the EOB may vote to ban the member from using the CVA designation in the future.  

The American Institute of Certified Public Accountants (AICPA) has a general process for handling complaints against its members in all disciplines, including the ABV designation.  Complaints must be in writing and mailed to the organization.  The AICPA conducts an initial review of the complaint and, if warranted, investigates the matter in accordance with the Joint Ethics Enforcement Program.  The results of an investigation are shared with the member after it is completed.

The Joint Ethics Enforcement Program requires that an investigation be conducted in a confidential manner and that results not be made public, with the following exceptions:

(a)    If after investigation, the matter is referred to a hearing panel of the Joint Trial Board, and the panel finds one or more members guilty of violating the Code of Professional Conduct, or

(b)   The investigation results in a settlement agreement involving membership rights (i.e., suspension or expulsion) and the member agrees to publication, the results will be published.[1]

The American Society of Appraisers’ (ASA) Constitution, Bylaws and Administrative Rules includes a section entitled Principles of Appraisal Practice and Code of Ethics.  This subsection includes six categories of violations:

  1. Deviations from good appraisal practice
  2. Failure to fulfill obligations and responsibilities
  3. Unprofessional conduct
  4. Unethical conduct
  5. Certain legal convictions
  6. Unlawful, illegal, or immoral conduct

Complaints against ASA members are sent to its Chief Executive Officer and forwarded to the ASA Ethics Committee.  If it is determined there is an ethics violation, the Board of Governors determines the sanctions warranted.  The Board of Governors has the authority to take action in the form of suggestion, censure, suspension, or expulsion.[2]

I have been on the NACVA EOB since June of 2016, and the experience has been both educational and interesting.  The Board has a small docket of cases it follows, some of which are ‘open and shut’, while others take years to investigate and remediate.  The Board is tasked with shuffling through evidence that is often subjective and secondary.  In all cases, the Board strives to be impartial and objective in its work.

Most NACVA members will never be aware of the EOB.  It is comprised of practitioners, just like yourself, who perpetually work to keep abreast of changes in the valuation industry and give their clients the best possible service.  But if you are one of the unfortunate ones who receives a letter from Pam Bailey, remember that the EOB is there to help you take the corrective action necessary to increase your expertise, preserve the integrity of your practice, and of the NACVA business valuation credentials.