A new statement from the International Organization of Securities Commissions (IOSCO) reinforces the global importance of high-quality valuation information in financial reporting.

The basis for the IOSCO statement is the crucial role that robust valuation practices play in maintaining confidence in global financial markets. The statement urges issuers, auditors, and valuation professionals to strengthen standards, transparency, and governance to ensure investors receive reliable, consistent, and decision-useful information across jurisdictions

IOSCO notes that valuations are integral to corporate financial statements and directly influence investor decision-making. To support high-quality reporting, organisations must adopt sound valuation methodologies, utilise qualified experts, and apply rigorous oversight through audit committees and governance structures. The statement emphasises that management remains responsible for all valuation information presented in financial statements, regardless of whether external experts are engaged.

IOSCO’s collaboration with the International Valuation Standards Council (IVSC) continues to promote alignment between valuation and accounting standards such as the IFRS Accounting Standards. Recent IOSCO–IVSC roundtables identified the need for stronger global application of International Valuation Standards (IVS) to improve the comparability, reliability, and integrity of valuations used in financial reporting.  The outcome of this collaboration is the IOSCO statement that outlines several key areas for improvement:

  • Valuation expertise: ensuring qualified professionals are engaged where complex valuation methods are applied.
  • Quality inputs and assumptions: prioritising objective, well-supported data and regularly reassessing underlying assumptions.
  • Active markets and comparability: carefully determining when market prices or comparable assets can be relied upon.
  • Disclosure: providing transparent explanations of valuation methods and sensitivities for users of financial statements.

IOSCO also underscores the critical role of external auditors in assessing management’s valuation processes. Citing findings from the International Forum of Independent Audit Regulators, IOSCO points to recurring weaknesses in how fair value measurements are audited and stresses the need for stronger professional scepticism and consistency in audit practices.

The statement concludes with a call to all parties including issuers, auditors, and those charged with governance to uphold objectivity, documentation, and integrity in the valuation process. Doing so will enhance investor confidence, improve the quality of financial reporting, and strengthen the global trust that underpins capital markets.  A copy of the statement can be downloaded via the link below:

For AVAA members, IOSCO’s statement reinforces the global importance of rigorous, transparent, and well-documented valuation practices, principles that underpin AVAA’s professional standards and ongoing commitment to strengthening confidence, accountability, and consistency across Australia’s auctioneering and valuation profession.

This matter rests within the policy responsibility of the AVAA Membership and Ethics Committee, which provides a direct avenue for members to shape fair and consistent membership pathways, strengthen professional standards, and influence policies that support colleagues across the Association.

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